New single-family home sales in December rose to their highest level in eight months and prices were the highest since April 2008, raising cautious optimism for a housing market recovery.
The Commerce Department said sales jumped 17.5 percent to a seasonally adjusted 329,000 unit annual rate after a downwardly revised 280,000-unit pace in November. Economists polled by Reuters had forecast new home sales rising to a 300,000-unit pace in December from a previously reported 290,000 unit rate. Compared to December a year earlier, sales were down 7.6 percent. Overall 2010 sales dropped 14.4 percent to a 321,000-unit rate.
Economists saw the gains as significant.
"Clearly we are seeing stabilization in new home sales and this data suggests some upward momentum that we have seen in existing home sales. What is important to realize is even in a period of softer new home sales, inventory continues to decline, said Dean Maki, chief U.S.. economist with Barclays Capital in New York.
“The level of inventory is at its lowest since the 1960s," Maki said. This suggests the big declines in housing starts are now behind us and housing starts should be on a gradual trend in 2011.”
Brian Bethune, an economist with HIS Global Insight in Lexington, Mass added: "It's meaningful to the extent that there is a pattern of numbers showing increases. It's a sign that there is a turnaround. Things are definitely perking up, but there is a question whether it's sustainable.
Read the latest report from the National Association of REALTORS®: December Existing-Home Sales Jump
Source: "New Home Sales Surge in December," Reuters(Jan. 26, 2011)
Wednesday, January 26, 2011
Tuesday, January 25, 2011
Where is buying a home cheaper than renting one?
It’s cheaper to buy a home rather than rent one in 72 percent of the 50 largest U.S. cities, according to Trulia’s rent vs. buy index, which compares the total cost of home ownership to the cost of renting.
"Since the start of the 'Great Recession,' many former home owners have flooded the rental market,” Pete Flint, CEO of Trulia, said in a news release about the index. “Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”
The index compares the median sales price of homes with the median rent on two bedroom apartments, condos, and townhomes that were listed on Trulia as of Jan. 10, 2011.
Here are the top 10 cities where it’s best to buy than rent, according to the index:
1. Miami
2. Las Vegas
3. Arlington, Texas
4. Mesa, Ariz.
5. Phoenix, Ariz.
6. Jacksonville, Fla.
7. Sacramento, Calif.
8. San Antonio, Texas
9. Fresno, Calif.
10. El Paso, Texas
Source: Realtormag.com - “Cheaper to Buy Than to Rent in 72% of Largest U.S. Cities,” Inman News (Jan. 24, 2011)
"Since the start of the 'Great Recession,' many former home owners have flooded the rental market,” Pete Flint, CEO of Trulia, said in a news release about the index. “Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”
The index compares the median sales price of homes with the median rent on two bedroom apartments, condos, and townhomes that were listed on Trulia as of Jan. 10, 2011.
Here are the top 10 cities where it’s best to buy than rent, according to the index:
1. Miami
2. Las Vegas
3. Arlington, Texas
4. Mesa, Ariz.
5. Phoenix, Ariz.
6. Jacksonville, Fla.
7. Sacramento, Calif.
8. San Antonio, Texas
9. Fresno, Calif.
10. El Paso, Texas
Source: Realtormag.com - “Cheaper to Buy Than to Rent in 72% of Largest U.S. Cities,” Inman News (Jan. 24, 2011)
Monday, January 24, 2011
Is That Home Renovation Worth The Cost?
Most homeowners think that all renovations or home improvement project ideas will increase the value of their property. The problem is that most people don't want to pay extra for someone else's dream project when it comes to buying a home.
Investing in home renovations can be important to do to make your home more comfortable for your family, but if you're going to be putting your home on the market any time soon or you are in the business of house-flipping, certain upgrades could end up doing you more harm than good.
If selling your home is on your list of things to do in the near future, here are some renovations to avoid:
1. Over-the-Top Kitchens
A $30,000 kitchen upgrade might seem like a necessity to you, nut this could be a turnoff for potential buyers who don’t necessarily like to cook. To these folks, the top-of-the-line stainless-steel stove and refrigerator may seem excessive, and they're not going to want to pay for them.
2. Over-the-Top Bathroom
Super-sized jet tubs and multiple shower heads, be your idea of perfection, but to budget or eco-minded buyers, all that extra water use is going to be a drawback. It’s best to keep your bathroom remodeling ideas modest, if you think you'll be putting your home on the market any time soon.
3. A Pool or Hot Tub
A pool can add significant value to your home. If you choose to put in an above-ground, it can knock 2 percent of your home's purchase price, since they're less appealing than in-ground pools. There are constant swimming pool costs ($1,500 on average per year) and they require a lot of maintenance. Pools are also a liability, especially for families with young children, and could affect home-owners insurance coverage. Pools will limit how many people want to buy your home, so keep that in mind before you have one installed (or consider buying a home with an existing pool).
4. Garage conversions
Turning your garage into an office, gameroom, or extra bedroom may not be the best idea. Potential buyers may have a problem with parking on the street and storing their lawn equipment in a storage building out back. If the extra space is needed to make your family more comfortable and you don’t mind alternate parking, converting a garage may be a good idea only if you are planning on living in your home for awhile. Potential buyers are likely to see this conversion as a waste of space, and a project (and expense) they'll have to deal with if they buy your home.
Investing in home renovations can be important to do to make your home more comfortable for your family, but if you're going to be putting your home on the market any time soon or you are in the business of house-flipping, certain upgrades could end up doing you more harm than good.
If selling your home is on your list of things to do in the near future, here are some renovations to avoid:
1. Over-the-Top Kitchens
A $30,000 kitchen upgrade might seem like a necessity to you, nut this could be a turnoff for potential buyers who don’t necessarily like to cook. To these folks, the top-of-the-line stainless-steel stove and refrigerator may seem excessive, and they're not going to want to pay for them.
2. Over-the-Top Bathroom
Super-sized jet tubs and multiple shower heads, be your idea of perfection, but to budget or eco-minded buyers, all that extra water use is going to be a drawback. It’s best to keep your bathroom remodeling ideas modest, if you think you'll be putting your home on the market any time soon.
3. A Pool or Hot Tub
A pool can add significant value to your home. If you choose to put in an above-ground, it can knock 2 percent of your home's purchase price, since they're less appealing than in-ground pools. There are constant swimming pool costs ($1,500 on average per year) and they require a lot of maintenance. Pools are also a liability, especially for families with young children, and could affect home-owners insurance coverage. Pools will limit how many people want to buy your home, so keep that in mind before you have one installed (or consider buying a home with an existing pool).
4. Garage conversions
Turning your garage into an office, gameroom, or extra bedroom may not be the best idea. Potential buyers may have a problem with parking on the street and storing their lawn equipment in a storage building out back. If the extra space is needed to make your family more comfortable and you don’t mind alternate parking, converting a garage may be a good idea only if you are planning on living in your home for awhile. Potential buyers are likely to see this conversion as a waste of space, and a project (and expense) they'll have to deal with if they buy your home.
Monday, January 3, 2011
Real Estate Transfer Taxes in Texas
As the Texas Legislature begins its 2011 session, it will be looking at various ways to eliminate the projected $25 billion shortfall from the 2011-2012 state budget. One of the ideas that will be considered again is the initiation of a real estate transfer tax.
There has been talk of a real estate transfer tax in Texas for years. In fact, last legislative session, more than 11 attempts were made to pass a real estate transfer tax. Thankfully, all of these bills were defeated. Real estate transfer taxes raise the cost of purchasing and selling homes, price some buyers out of the market, and reduce economic activity.
What it is
According to the Texas Association of REALTORS®: "A real estate transfer tax is a tax assessed when ownership of property is transferred from one party to another. Some states also assess such a tax on long-term leases. This type of tax typically comes in the form of a percentage of the value of the property."
Currently, Texas is one of only 13 states without a real estate transfer tax. However, with a $25 billion projected budget shortfall, the state is eager to get money from any means available and the real estate industry is a prime target. Transfer tax amounts vary by state from 0.1 percent of the purchase price to as much as 1.5 percent of the purchase. Therefore, on the sale of a $200,000 home, a 1.5 transfer tax could add as much as $3,000 in additional costs that a buyer or seller would have to pay at closing.
Impact
According to the Texas Association of REALTORS®: "The National Association of REALTORS® commissioned a study to analyze the effects of a transfer tax on real estate. The report assumed a tax rate of 0.5% and a $125,000 purchase price. Based on these assumptions, the cost of buying a home would increase by about $600, and home sales would decline by almost 3%. In addition, the Real Estate Center at Texas A&M University concluded that the creation of a transfer tax on real estate may create more problems than it solves. This type of tax could cost Texas $955.5 million in lost economic activity with 11,575 jobs lost."
What it Does
•Transfer taxes raise the cost of purchasing and selling a home-pricing many buyers and sellers out of the market and reducing local economic activity. This kind of taxation is damaging and it affects anyone who is trying to buy or sell a home, land, or business, including: New homeowners, seniors wanting to downsize, churches, civic groups, and military families needing to move due to relocation.
•Transfer taxes are discriminatory as they tax only one type of asset-real estate. Similar taxes are rarely applied to financial assets, such as stocks and bonds.
•Transfer taxes can be volatile. For example, a transfer tax of $10 per transaction was initiated in New Jersey, but within 12 months the rate was increased to .78 percent of the sales price.* Therefore, a home priced at $300,000 initially had a transfer tax of $10, but at .78 percent that tax increased to $2,340.
•A real estate transfer tax in excess of the costs associated with the administration of property-ownership records is an arbitrary levy. This levy is not systematically related to a household's ability to pay, or to the benefits derived from public services.
During the 81st regular session of the Texas Legislature in 2009, there were three senate bills (SB-950, SB-934, SB 942) that were introduced that could potentially increase the costs of purchasing a home.
Senate Bill 942, was a bill that would have allowed Texas counties to enact new taxes for transportation projects. A new tax option considered was a real estate transfer tax to be paid within 30 days of the transfer of property. Each county would have had the power to set their own transfer tax rates and would require that the real estate transfer tax be paid before the county clerk records any instrument relating to a real estate transaction in the state of Texas.
This spring, the 82nd Texas Legislature will look at implementing a transfer tax. Be sure to voice your concerns to your state office holders by asking them to oppose any real estate transfer tax and by giving your fair share to TREPAC. Your TREPAC dollars will help fight to keep taxes like these from ever becoming law.
*According to the NATIONAL ASSOCIATION OF REALTORS® Web site, www.realtor.org.
There has been talk of a real estate transfer tax in Texas for years. In fact, last legislative session, more than 11 attempts were made to pass a real estate transfer tax. Thankfully, all of these bills were defeated. Real estate transfer taxes raise the cost of purchasing and selling homes, price some buyers out of the market, and reduce economic activity.
What it is
According to the Texas Association of REALTORS®: "A real estate transfer tax is a tax assessed when ownership of property is transferred from one party to another. Some states also assess such a tax on long-term leases. This type of tax typically comes in the form of a percentage of the value of the property."
Currently, Texas is one of only 13 states without a real estate transfer tax. However, with a $25 billion projected budget shortfall, the state is eager to get money from any means available and the real estate industry is a prime target. Transfer tax amounts vary by state from 0.1 percent of the purchase price to as much as 1.5 percent of the purchase. Therefore, on the sale of a $200,000 home, a 1.5 transfer tax could add as much as $3,000 in additional costs that a buyer or seller would have to pay at closing.
Impact
According to the Texas Association of REALTORS®: "The National Association of REALTORS® commissioned a study to analyze the effects of a transfer tax on real estate. The report assumed a tax rate of 0.5% and a $125,000 purchase price. Based on these assumptions, the cost of buying a home would increase by about $600, and home sales would decline by almost 3%. In addition, the Real Estate Center at Texas A&M University concluded that the creation of a transfer tax on real estate may create more problems than it solves. This type of tax could cost Texas $955.5 million in lost economic activity with 11,575 jobs lost."
What it Does
•Transfer taxes raise the cost of purchasing and selling a home-pricing many buyers and sellers out of the market and reducing local economic activity. This kind of taxation is damaging and it affects anyone who is trying to buy or sell a home, land, or business, including: New homeowners, seniors wanting to downsize, churches, civic groups, and military families needing to move due to relocation.
•Transfer taxes are discriminatory as they tax only one type of asset-real estate. Similar taxes are rarely applied to financial assets, such as stocks and bonds.
•Transfer taxes can be volatile. For example, a transfer tax of $10 per transaction was initiated in New Jersey, but within 12 months the rate was increased to .78 percent of the sales price.* Therefore, a home priced at $300,000 initially had a transfer tax of $10, but at .78 percent that tax increased to $2,340.
•A real estate transfer tax in excess of the costs associated with the administration of property-ownership records is an arbitrary levy. This levy is not systematically related to a household's ability to pay, or to the benefits derived from public services.
During the 81st regular session of the Texas Legislature in 2009, there were three senate bills (SB-950, SB-934, SB 942) that were introduced that could potentially increase the costs of purchasing a home.
Senate Bill 942, was a bill that would have allowed Texas counties to enact new taxes for transportation projects. A new tax option considered was a real estate transfer tax to be paid within 30 days of the transfer of property. Each county would have had the power to set their own transfer tax rates and would require that the real estate transfer tax be paid before the county clerk records any instrument relating to a real estate transaction in the state of Texas.
This spring, the 82nd Texas Legislature will look at implementing a transfer tax. Be sure to voice your concerns to your state office holders by asking them to oppose any real estate transfer tax and by giving your fair share to TREPAC. Your TREPAC dollars will help fight to keep taxes like these from ever becoming law.
*According to the NATIONAL ASSOCIATION OF REALTORS® Web site, www.realtor.org.
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