Homes Sales Rise in January 2011

RISMEDIA, February 24, 2011—The uptrend in existing-home sales continues, with January 2011 sales rising for the third consecutive month with a pace that is now above year-ago levels, according to the National Association of REALTORS®.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7% to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3% above the 5.09 million level in January 2010. This is the first time in seven months that sales activity was higher than a year earlier.
Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” said Lawrence Yun, NAR chief economist. “The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”
A parallel NAR practitioner survey shows first-time buyers purchased 29% of homes in January, down from 33% in December and 40% in January 2010 when an extended tax credit was in place.
Investors accounted for 23% of purchases in January, up from 20% in December and 17% in January 2010; the balance of sales were to repeat buyers. All-cash sales rose to 32% in January from 29% in December and 26% in January 2010.
“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said.
All-cash purchases are at the highest level since NAR started measuring these purchases monthly in October 2008, when they accounted for 15% of the market. The average of all-cash deals was 20% in 2009, rising to 28% last year.
The national median existing-home price for all housing types was $158,800 in January, down 3.7% from January 2010. Distressed homes edged up to a 37% market share in January from 36% in December; it was 38% in January 2010.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the median price is being dampened by unusual market factors.
“Unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts, undoubtedly pulls the median price downward,” Phipps said. “Given the levels of inventory we see today, we believe that traditional homes in good condition have held their value.”
Total housing inventory at the end of January fell 5.1% to 3.38 million existing homes available for sale, which represents a 7.6-month supply at the current sales pace, down from an 8.2-month supply in December. The inventory supply is at the lowest level since December 2009 when there was a 7.3-month supply.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.76% in January from 4.71% in December; the rate was 5.03% in January 2010.
Single-family home sales rose 2.4% to a seasonally adjusted annual rate of 4.69 million in January from 4.58 million in December, and are 4.9% higher than the 4.47 million level in January 2010. The median existing single-family home price was $159,400 in January, down 2.7% from a year ago.
Existing condominium and co-op sales increased 4.7% to a seasonally adjusted annual rate of 670,000 in January from 640,000 in December, and are 7.9% above the 621,000-unit pace one year ago. The median existing condo price was $154,900 in January, which is 10.2% below January 2010.
Regionally, existing-home sales in the Northeast fell 4.6% to an annual pace of 830,000 in January from a spike in December and are 1.2% below January 2010. The median price in the Northeast was $236,500, which is 4.0% below a year ago.
Existing-home sales in the Midwest rose 1.8% in January to a level of 1.14 million and are 3.6% above a year ago. The median price in the Midwest was $126,300, which is 3.2% below January 2010.
In the South, existing-home sales increased 3.6% to an annual pace of 2.02 million in January and are 8.0% higher than January 2010. The median price in the South was $136,600, down 2.1% from a year ago.
Existing-home sales in the West rose 7.9% to an annual level of 1.37 million in January and are 7.0% above January 2010. The median price in the West was $193,200, down 5.7% from a year ago.

Why Buyers Should Use a Buyers Agent.

When selling a home, most people will engage the services of a real estate agent to help them. But do you need an agent when purchasing a home as well? The answer is a resounding YES, especially if you are a first time buyer. Remember, calling the listing agent of each home you want to see, does you no good.  The sellers agent works for the seller.  They do not have to disclose everything to you.  They do not work in your best interest. 
Enlist the professional expertise of a Realtor to represent you as a buyer!!

Here are just a few ways that realtor can help you with one of the most important purchases of your life:
1) Realtors know the process - buying a home is more than just finding what you want; an agent will take you step by step through the entire process: from getting pre-approved at your financial institution to getting an inspection, to picking up your keys on closing day. A realtor will be able to anticipate any bumps along the way and smooth the way to a successful closing.
2) Realtors are negotiating power-houses - an important part of their job is to negotiate the best price they can for you and make sure you don't pay a penny more than you should. Just because a seller is asking a certain price, doesn't mean you have to pay it.
3) Realtors know the contracts - they will go over all the clauses in the contract and explain exactly what you are signing and why. If you don't understand something, a realtor will explain it until you do.
4) Realtors know the neighbourhoods - you may find that perfect house, but if it is in a high crime neighbourhood, next to a crack house or was the site of a mass murder, your realtor will know.
5) Realtors work in your best interest - When you sign a buyer's agreement with a realtor, they work for you getting you the best price for your dream home.
6) MLS - realtors will be able to tell you as soon as a home comes on the market that is within your specifications. The website that the general public has access to is a few days behind what the realtors have access to. You can receive hot new listings every day before everyone else does. This can give you a significant advantage over other buyers.
7) You don't pay them a cent- realtors are generally paid from the seller, so there is nothing out of pocket for you as the buyer - how cool is that?
8) They are your co-ordinators- once you put an offer on a home, they will act as your liaison with your financial institution, your lawyer, and your home inspector. They will make sure that everyone has what they need in order to complete their part of the transaction. They don't stop working until you are moved in to your new home and are satisfied that everything is as it should be.
Having a real estate agent by your side has many benefits and they will ensure that you have a smooth, safe, pleasant experience when buying your next home. Don't be afraid to hire an agent when buying a home; it is just as important to have a buyer's agent on your side as it is when selling.

Article written by Lisa Udy of the Platinum Real Estate Group.

Paint Away the Winter Blues!

Looking for an in-expensive way to completely change a room?  Paint can be one of your biggest bangs for your buck.  Whether you just want to freshen up the current color, or completely change a rooms look.  Here are some tips for painting success.....

1. Know Your Space. Ask yourself why you want to make a change. Are you planning to sell your home? Do you want to make the space more personal or more functional? The answers will determine what and how much you do.
2. Trends. While people often shy away from putting color on their walls, the opposite is true of our furniture.
Many people are selecting bold furniture these days. If you already have a lot of color in your room, then you may consider doing something that has in the past been considered a boring and unimaginative choice: Go white.
White walls are fresh and bright and can complement your colorful furnishings by not competing with them.
Get those images of the dull, dingy white walls of most rentals out of your mind and think of the white as a canvas for your art.
3. Stencil. An inexpensive and personal way of stenciling is to create your own using poster board and tracing paper. Sketch your design on the tracing paper, refine it and when you’re satisfied, flip it over and trace it onto the poster board. Then cut it out with a utility or craft knife and stencil away.
4. Consider Your Mood. Spend some time in the room you’re going to paint and think about how you want to feel when you’re there. Will this be a space to spend time with the children, or is this a quiet place to write that novel you’ve been planning? Are you going to turn it into an exercise room, or is it a place for quiet reflection?
Then think about how color affects the plan for the room. You might not accomplish much if you paint your home gym in cool greens and blues, but vibrant yellows and oranges could keep you on the treadmill longer.
And while red is a romantic color, if you paint your entire bedroom in scarlet, you might never get any sleep.
5. Finding Inspiration. If you want to give your room a paint makeover but are unsure of what color to use- take a clue from your furnishings.
Take something from the room for your inspiration.  It could be a pillow, piece of artwork etc.
Take it to the paint store or grab some paint strips and bring them home. Hold them up to the item and see how the color works.
For example, with a floral pillow, a green shade could bring out hidden greens in the pillow; orange could highlight other colors.
Try to avoid being too matchy-matchy.
6. Color Carefully. Too much color in one room can be overwhelming. Be sure and safe by using tones from nature. Experiment a bit, bit stay away from candy colors.  Too much of these kind of colors in one room can be overwhelming. 
7. Color Test. Pick two or four colors that you like and then pick up some relatively inexpensive sample-size paints.
Paint patches on each wall of the room. Live with it for a few days, looking at it from different angles, at different times of the day and in different light. See how it works with your furnishings and how it looks from other rooms.
8. Accent? Maybe. The trend not too long ago was to create an accent wall- typically in red. But you need to be careful and use accent walls sparingly.
Often, the darker color only makes the other walls appear dull or dingy. And the deeper the contrast, the easier it is to see flaws in the paint job-splashes on crown molding or imperfect lines.

Whatever you decide to do.  Don't afraid of color!  Its fun to create a brand new room with fresh paint, new wall decor and some new pillows.  Its inexpensive too!

CT Conveyance Tax Explained

Many sellers are unfamiliar with the fact that they are going to have to pay a conveyance tax when they sell their home.  Below is an explanation on what to expect and how the tax is calculated.  Please feel free to ask me any additional questions.

Summary
With some exceptions, Connecticut law requires a person who sells real property for $ 2,000 or more to pay a real estate conveyance tax when he conveys the property to the buyer. The tax has two parts: a state tax and a municipal tax. The state tax rate is either 0. 5% or 1% of the sale price, depending on the type of property and how much it sells for, and the town tax rate is either 0. 25% or up to a maximum of 0. 5% depending on where the property is located. The applicable state and local rates are added together to get the total tax rate for a particular transaction. The seller pays the tax when he conveys the property (CGS § 12-494-504h).
State Tax
The state tax is either 0. 5% or 1% of the total sales price, depending on the type of property. The tax is 0. 5% on (1) residential dwellings sold for $ 800,000 or less, (2) other types of residential property, (3) unimproved land, and (4) bank foreclosures for mortgage delinquencies. The 1% rate applies to (1) sales of nonresidential property other than unimproved land and (2) any portion of the sale price of a residential dwelling that exceeds $ 800,000.
Many types of transactions are exempt from the tax, including transfers between spouses, sales to certain nonprofit entities, and certain relocation company resales of residential property acquired through employee relocation plans.
Municipal Tax
In addition to the state tax, sellers must pay a municipal real estate conveyance tax. The municipal tax rate is currently 0. 25% for all towns plus additional tax of up to 0. 25% for 18 eligible towns that chose to impose the increased rate. Thus, the municipal tax rate can range from 0. 25% to 0. 5%, depending on where the property is located.
The law allows 18 towns to adopt the higher tax rate. They are the targeted investment communities and a town that has a manufacturing plant that qualifies for enterprise zone benefits. As of November 29, 2005, 17 of these towns had imposed the higher rate: Bloomfield, Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven New London, Norwalk, Norwich, Southington, Waterbury, and Windham. Stamford is the only authorized town that has not increased its rate.
Legislative Action on Rate Increases
Recent legislative action on the real estate conveyance tax has focused on the municipal portion of the tax. Prior to March 15, 2003, the municipal tax was a flat 0. 11% of the sale price regardless of the town where the property is located. But in 2003, the General Assembly (1) temporarily increased the municipal tax rate in all towns to 0. 25% and (2) temporarily gave 18 towns the option of adding 0. 25% for a total rate of 0. 5%.
Under the 2003 law, all the municipal tax rate increases were to expire on July 1, 2004. But in the 2004 session, the General Assembly (1) extended the temporary increase in the basic municipal tax rate for another year, until July 1, 2005, and (2) made the optional higher rate in the 18 towns permanent (PA 04-216). In 2005, the General Assembly extended the increase in the basic municipal rate for an additional two years, until July 1, 2007. It also allowed the 18 towns to add up to 0. 25% to the basic rate instead of requiring them to add either a flat 0. 25% or nothing (PA 05-268). Thus, under current law, as of July 1, 2007, the basic municipal rate is scheduled to drop from 0. 25% to 0. 11% and the rate in the towns with the higher rate is scheduled drop from a maximum of 0. 5% to 0. 36%.
FEDERAL CAPITAL GAINS TAX RATE
In 2003, Congress reduced the maximum income tax rate on most capital gains from 20% to 15% for noncorporate taxpayers. The lower rate applies to distributions from long-term capital gains (gains from assets held for longer than one year) that occur after May 5, 2003. For taxpayers in the two lowest income tax brackets (10% and 15%), the 2003 law reduced the tax rate on long-term capital gains from 10% to 5% for the 2003 through 2007 tax years and to zero for the 2008 tax year.
These reduced capital gains rates were slated to expire on December 31, 2008. But Section 102 of the Tax Increase Prevention and Reconciliation Act of 2005, signed into law on May 17, 2006, extended the 2008 rates for an additional two years, until December 31, 2010. Thus, for the 2008, 2009, and 2010 tax years, the maximum long-term capital gains tax rate will remain at 15% and while lower-income taxpayers will pay no tax on such gains.  By, Judith Lohman, Chief Analyst

2011 – The Year of the Real Estate Investor

by Greg Rand on January 3, 2011

Everyone likes to make predictions when the new year rolls around. Here are mine:
1. One in four home sales in 2011 will be purchases by investors.
2. Reports will come out shortly that over 1,000,000 new rental households were created in 2010. That’s close to 2,000,000 over the last 24 month. This, combined with the fact that homeownership rates are down, mortgage guidelines are tighter and foreclosures are up will fuel the investor market even more.
3. The new Congress will investigate the role of Fannie Mae and Freddie Mac in the housing and financial crisis, and Barney Frank (who will be sitting on the panel) will give me some precious sound bytes for my radio show.
4. Home prices will drop another 5% nationally, but home sales will increase over 10%.
5. Media coverage of the economy will turn overwhelmingly positive, as both political parties and their allies in media have the incentive to improve consumer confidence. This is the first time in 10 years that neither party is motivated to drive the economy down in order to win the next election. Both want it to improve and both will claim credit for it.
Let me know what you think.