I just received a great update from Tee Tillman of
Colony Title located in Columbia. To me it's an excellent summary of
2013 and a great peek at what to expect for 2014.
From Tee,
Welcome
to 2014. With a new year comes renewed optimism on the real estate
front, and 2014 is no different. But, this time there seems to be some
reason for cautious optimism. During 2013 we saw the gradual
stabilization of housing prices in most markets, which the experts
predict will bring more sellers back into the marketplace. Sellers who
previously withheld from putting their homes up for sale are now seeing
that they may in fact be able to get their price. That’s good news as
most realtors felt there were not enough homes on the market.
Rates
will start to creep up as the Fed will gradually ease their purchase of
bonds which has held the interest rates below what they should have
been. But do not expect a wholesale retreat. The predictions are that
the rates will fluctuate between 4.375% and 5.5% with an average just
about the 5% mark. This is still well below what we had experienced just
a few years ago. There will be a larger gap between the 30 year fixed
and the 5/1 ARM so we may see more buyers going to the 5/1 ARM which is
predicted to be in the 2.875% to 3.875% range. For first time home
buyers who traditionally keep their first home less than five years,
it’s a great scenario. By the time they are ready to purchase their
first move up property, they will have had time to build equity in their
existing home.
Congress has not as of yet acted on the extension of the tax break for those who have received the benefit of loan forgiveness on their principal residence, so look for that to be an action item on the agenda early this year. As of January 1, 2014 if you sold your home via a short sale after that date, you will have to pay taxes on the forgiven debt as “phantom income.” In an article in the Washington Post “according to the National Association of Attorneys General an estimated 7.1 million homes are still in a negative equity position.” To help the real estate recovery, it would seem reasonable for Congress to extend the tax forgiveness for another year.
Congress has not as of yet acted on the extension of the tax break for those who have received the benefit of loan forgiveness on their principal residence, so look for that to be an action item on the agenda early this year. As of January 1, 2014 if you sold your home via a short sale after that date, you will have to pay taxes on the forgiven debt as “phantom income.” In an article in the Washington Post “according to the National Association of Attorneys General an estimated 7.1 million homes are still in a negative equity position.” To help the real estate recovery, it would seem reasonable for Congress to extend the tax forgiveness for another year.
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