Trulia: Owning Costs 44% Less than Renting

Home price gains may be outpacing increases in rent, but the cost of being a homeowner is still much less than that of a renter, according to Trulia’s Winter 2013 Rent vs. Buy report.

After factoring all cost components including transaction costs, taxes, and opportunity costs, Trulia found buying a home is 44 percent cheaper than renting, down slightly from 46 percent a year ago.

“Although buying a home is still cheaper than renting, the gap is closing,” said Jed Kolko, Trulia’s chief economist. “In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.”

In the last year, asking home prices showed a 7 percent gain compared to a 3.2 percent increase in rents during the same time period, according to data from the real estate site.

Trulia explained low mortgage rates have kept the cost of owning down; for the analysis, a 3.5 percent mortgage rate was assumed.

The San Francisco-based company also revealed that out of the 100 largest metros analyzed, buying was more affordable than renting in all metros.

In some metros, the cost of buying was much less than the national average. The buy-rent gap was the largest in Detroit, where buying costs 70 percent less than renting. For the next four metros in top five, the cost of owning was 63 percent less than renting; the four metros were Dayton and Cleveland in Ohio; Warren, Michigan; and Gary, Indiana.

Although owning was found to be less expensive in all metros, owners in San Francisco averaged the smallest savings at 19 percent, a steep decrease from the 35 percent savings seen in 2012.

If one were to receive a mortgage rate of 4.5 percent, Trulia noted the cost of buying would be just 9 percent cheaper in San Francisco. However, a rate of 4.5 percent would still make buying more affordable than renting in all metros analyzed.

“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat,” Kolko added. “Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets – so long as they can get a mortgage in the first place.”

Other metros where owning may not be as enticing to borrowers based on savings were Honolulu, where the cost of owning is 23 percent cheaper, followed by San Jose (-24 percent), New York (-26 percent) and Albany (-30 percent).

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Mortgage Forgiveness Debt Relief Act Future?

NEW YORK (CNNMoney) — The clock is ticking on a taxbreak that saves struggling homeowners from paying thousands of dollars to the IRS.

If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.

So if you owe $150,000 on your home and it sells for $100,000 in a foreclosure auction, the IRS could tax you on the remaining $50,000. For someone in the 25% tax bracket, that would mean paying $12,500 in taxes on the foreclosure.  Similar taxes would apply for forgiven amounts in short sales and principal reductions.

“People trying to do short sales are freaked out about it,” said Elizabeth Weintraub, a real estate agent in Sacramento, Calif. “They’re telling me they’ll do whatever it takes to close by the end of the year.”

Should the tax break expire, a large number of mortgage borrowers could be affected. More than 50,000 homeowners go through foreclosure each month.Meanwhile, the number of short saleshas tripled over the past three years to a rate of about half a million a year.And, under the terms of the $25 billion foreclosure abuse settlement, roughly one million borrowers may have their mortgage debt lowered through principal reductions over the next couple of years.

“If there ever was a no-brainer in housing policy, this would be it,” said Jaret Seiberg, a policy analyst for Guggenheim Securities.

Yet, Seiberg is skeptical the exemption will get extended. Now that the election is over, he thinks Congress will be heading into a “lame duck” session, with very little legislation moving forward through the end of the year.

In addition, the cost of the exemption could make it a point of contention, he said. The office of Sen. Max Baucus, who heads the finance committee, estimated the cost of a one-year extension at $1.3 billion.

Others disagree. Tom Kolpien, the press secretary forRep. Tom Reed of New York, said Congress will likely act before the end of the year. (Reed is currently pushing for the extension on the House Ways and Means Committee).

“Both parties, both houses of Congress agree it’s good policy and it needs to get done,” said Jamie Gregory, chief lobbyist for the National Association of Realtors, which supports an extension. “The hold up is the process. I’m confident it will get done. I just don’t know how.”

Even if Congress allowed the exemption to expire, not all borrowers withforgiven mortgage debt will take a tax hit. If the debt is discharged in a bankruptcy, no tax is due. And anyone who is insolvent — meaning they have more debt than assets — at the time the debt was forgiven — would not have to pay the tax.

Real Estate Prices on the Rise

For local information about the Destin, Santa Rosa Beach, Niceville, and Crestview areas, contact me at MykeSaysSold@aol.com  850-305-6256

Rental Market Tightens, Prices Rise

By: Krista Franks Brock

Demand in the single-family rental market continues to expand even as inventory tightens, according to the latest MarketPulse report from CoreLogic. Comparing lease rates, supply, pricing, and the ratio between bid prices and asking prices clearly demonstrates an increasingly tightening market.

“[S]ome of the new demand is being driven by former homeowners who have experienced foreclosure,” CoreLogic stated in its report. As a result, markets experiencing the greatest growth in single-family rental demand are the same markets that were hardest hit by the housing crisis, including Florida, California, and Arizona.

Nationally, single-family leases were up 7 percent in August year-over-year and have shown a 12 percent increase year-to-date. The August data is not an anomaly but a growing trend, according to CoreLogic, which reported leasing volumes rising sequentially each month over the last two years.

At the same time, inventory has been decreasing. In August, single-family rental inventory was down 11 percent from a year earlier.

The market held about 2.6 months’ supply in August. A year earlier, supply was at about 3.2 months.

Inventory declined sharply this past summer with a strong rise in closings, according to CoreLogic.

Listings are being rented faster. In August, a listing took about six weeks to rent, down from eight weeks a few years ago in 2009.

After declining for two years, rental prices have been on the rise since 2011, rising 2 percent over the year in 2011 and 1 percent year-to-date in 2012.

CoreLogic expects rental prices to continue to rise throughout the rest of this year and next. Rental prices are generally less volatile than home prices, and home prices have experienced increases of late.

The ratio between listing rent and actual rent paid is another indicator that points to a tightening in the single-family rental market. Two years ago when rental prices were declining and inventory was higher, the spread was about 4 percent. Today it stands at about 2 percent.

“[A] weak labor market, tight underwriting for owner-occupied properties and elevated foreclosures will ensure continued strong demand for single-family rentals,” according to CoreLogic.

Market Trends in Niceville Florida

Listing price – Niceville

Average Listing Price  $316,792  -1.1%
Median Sales Price  $241,000  +12.1%
Average Price/sqft  $124  +10.7%
Number of Sales  109  -32.7%

Destin Seafood Festival–This Weekend

No Admission Charge – Donations Accepted at the Door

34th Annual Destin Seafood Festival October 5th – 7th, 2012

Welcome to the 34th annual Destin Seafood Festival. The Seafood Festival is hosted along the beautiful Destin Harbor and the Harbor Boardwalk. With the action of the Destin Fishing Rodeo right in the heart of the Festival, there is lots of excitement along the docks. This is so much more than a festival to us- It is a tribute to the rich history of the Destin Harbor and the Fishing community.. The Festival was started by the Destin Charter Boat Association’s Women’s Auxiliary in 1978 as a fund raiser for the local fishing fleet and to help bring people to Destin in the fall.  Today the Destin Charter Boat Association has teamed up with the local business community and Destin Restaurants and Seafood Markets to bring this much loved community tradition to the community.

Come join us along the Boardwalk for a great weekend of seafood, live music, arts & crafts and family fun. More than 60,000 locals and visitors are expected to attend and we are ecstatic to host this event. This three day festival will be full of arts, crafts, music, food, entertainment, fireworks, and excitement for all! It will showcase the Best that Destin has to offer on the Harbor. Stroll along the Harbor Board Walk from one end to the other with over a mile of Festival on the water showcasing Destin’s Fishing Fleet, Harbor Restaurants & Bars and breath taking sunsets!

The 2012 Festival brings Ocean Reef Vacation Resorts on board as our Official Accommodation’s Sponsor of the Destin Seafood Festival. The Ocean Reef Crew represents the “Best” of the Emerald Coast and we are happy to have them onboard!

Cheers!

Your Chairman

Mike Eller, Co President Destin Charter Boat Association

2012 Destin Seafood Festival Hours

  • Friday, October 5th, 3 pm – 10 pm
  • Saturday, October 6th, 10 am – 10 pm
  • Sunday, October 7th,11 am – 5 pm

For Sale By Owner–I can do it myself and save lots of money!

The house has to be immaculate inside and out,

Potential buyers are beating on your door and calling the number you posted out in the yard

The legal and financial details of the home sale process loom.

Don’t be tempted to handle this situation by yourself; instead, make your life infinitely easier and use a Realtor to help you sell
your home.

The lure of saving money is a strong one.

Most Realtors charge between 6 to 7% on commission. As the seller, this comes out of your proceeds
at closing. I know you’re thinking that there’s no way that using a Realtor is worth anywhere near this much money.

However, it truly is worth every penny; here are the top reasons why you should use a Realtor when selling your home.

1. The Security of Your Family and Home

You cannot put a value on the security of your family and home. You
want your family to be safe in your home without having to worry. But remember
when I mentioned the hoards of potential buyers for your home? If you sell your
home yourself, you have to meet with each one of these buyers by yourself. The
problem is you never know who these people really are. It’s horrific to
consider, but it has happened where people have gone to a home on the premise of
looking to purchase it and instead have committed a crime.

The realtor, with the use of an electronic lockbox, knows exactly who was in the house AND when!  Realtors also get to know their clients, so there are not strangers casing your home.

When you use a Realtor, you don’t have to meet with the potential buyers and expose yourself and your family to possible harm. Instead, each person that enters your home is accompanied by a licensed Realtor.
Because the person is in your home with a Realtor, you and your family don’t need to be there. This mitigates the risk of someone harming you while in your home.

The chance of someone committing a crime against your property, either through theft or vandalism, is drastically reduced by their Realtor being
present.

2. The Value of Your Time

Let’s consider the hassle of dealing with potential buyers. When you sell your home yourself, you’re the sole contact with potential buyers.
If someone wants information, they contact you. This means your phone can be ringing constantly.  You can’t just ignore these calls; if you do, your house will take even longer to sell.

Remember the part about keeping your house immaculate? When you sell your home yourself, this has to be true 100% of the time.

People can and will pull up outside your home and demand to look inside at any time of the day or night. If you ask them to come back at
a more convenient time, you could easily lose a sale.

By using a Realtor, your time is reaffirmed to be as valuable as I know that it is.  A Realtor handles all the phone calls, and is
specially trained in how to answer these calls professionally without compromising the sale of your home. Your Realtor coordinates the showings
with other Realtors, leaving you with specific times for the showings. This will allow you to relax and enjoy the time you have remaining in your home.

3.  The Value of Peace of Mind for the Future

Selling a home is a complicated legal and financial prospect. Sure, you can buy generic forms to fill out for the Purchase Agreement and everything else.   But what assurance do you have that they’re filled out in a way that protects you for the future? After all, you certainly don’t want to deal with a lawsuit five years from now with your buyer saying that you made an error in the paperwork on the transaction.

When you hire a Realtor, they shoulder this burden. Realtors are required to carry what’s known as Errors & Omissions insurance. This
insurance protects you from such little errors. If there’s a problem, the insurance company is who works to resolve the situation, not you.

So don’t succumb to the lure of saving the commission money.

Hiring a Realtor is the absolute best thing you can do as you prepare to sell your home

Biggest Mistakes Buyers Make in a Hot Seller’s Market

In the current seller’s market that exists in many parts of the country, buyers need to perform near perfectly to attain the home of their dreams. Many of the best new listings that come to market are receiving multiple offers . . . and in just a few days on the market. So what can you do as a buyer to enhance your odds of getting your offer accepted?

1)      Get Serious and Work with a Real Estate Agent – while this sounds like a given, many buyers are casually looking and only get serious when they see a home on the internet and start their quest to buy that home from whatever agent they can find. By the time they get mobilized the home is gone!  Here in the Destin, and most of the Northwest Florida market, many homes that are terrific deals have multiple offers almost immediately after going on the market.

2)      Get Ready to Buy – There are great local lenders here in Destin, Niceville, Fort Walton Beach, Crestview, and Navarre markets – be sure to get prequalified or better yet preapproved for your loan. This eliminates any surprises and demonstrates to sellers that you are serious, qualified, and able to close. Have your proof of funds ready to show which is often required.  Especially if you find a foreclosure, they will want this proof of funds to come with the offer.

3)      Operate with a Sense of Urgency – Have your real estate agent set you up a new listings alert and when a hot property comes to market moving quickly is extremely important. If a listing comes to market on a Wednesday, waiting until Saturday to see it because you want to watch TV won’t work. Always assume that other interested buyers are seeing the home on day 1 and making an offer on day 1!

4)      Make Clean Offers – offers that are not clean result in delays and counter offers– delays results in more buyer offers – multiple offers drive prices up and probability of getting your dream home down. If there is something specific that the seller is looking for in your offer do everything possible to accommodate it.

Why Hire A Real Estate Agent?

The typical real estate transaction involves at least two dozen separate individuals – insurance assessors, mortgage brokers and underwriters, inspectors, appraisers, escrow officers, buyer’s agents, seller’s agents, bankers, title researchers, and a number of other individuals whose actions and decisions have to be orchestrated in order to perform in harmony and get a home sale closed. It is the responsibility of your real estate agent to expertly coordinate all the professionals involved in your home purchase and to act as the advocate for you and your interests throughout.

Seven main roles of your real estate agent
A Buyer’s Real Estate Agent:

  1. Educates you about your market.
  2. Analyzes your wants and needs.
  3. Guides you to homes that fit your criteria.
  4. Coordinates the work of other needed professionals.
  5. Negotiates on your behalf.
  6. Checks and double-checks paperwork and deadlines.
  7. Solves any problems that may arise.

Home Staging–Things That Help (Or Hinder)

Silly Staging Ideas Room-by-Room:

Living Room. Displaying photos of people more attractive than family members by hanging frames with manufacturers’ photos still inside, or even displaying photos of celebrities around the room, are not good ideas. Not only silly, this breaks the ‘de-personalize’ staging rule. Remove any photos, diplomas or similar items, as they do nothing but distract buyers.  Look for some tasteful art for staging instead.

Kitchen and Dining Room. Nothing screams ‘staged home’ like a formally set dining room. Less is more! Skip the formal setting and put a simple vase of flowers on the table instead. Clear kitchen counters of all clutter and add a simple bowl of fruit for a clean, open look.

Bedroom. The casually draped throw over the foot of the bed with ‘tea for two’ on top has been overdone, and buyers know you don’t live that way. Invest in some nice bedding, put night tables on either side of the bed and include one long dresser and a tall chest of drawers in the master bedroom. If the room seems crowded with those items, use a double bed instead of a queen or king.

Bathroom.Tassels draped over hand towels, seashells nestled atop a stack of towels wrapped in a bow and champagne flutes on the bathtub are perhaps befitting for a honeymoon suite, but not a family home. Don’t fill the bathtub with blue-tinted water and don’t tie a ribbon around the toilet seat either. These have been done, but don’t make the same silly mistake. Invest in new hand towels, a new shower curtain and remove personal items from countertops such as toothbrushes and makeup.

A buyer won’t buy based on dining room settings or a frou-frou bathroom. After staging your home, you want a clean, de-personalized, clutter-free space. If you’ve done a good job, a buyer won’t be able to tell it was staged at all.