– Mortgage Debt Relief Act to Expire at end of year.
– The median price for homes was up 4.4% year-over-year in February.
– The number of properties owned by the banks was down 15.6% year-over-year.
Once upon a time, when a homeowner did a short sale, the IRS counted the difference between what the bank took and what the homeowner owed as income. Not much incentive there for sellers.
In 2007, the federal government enacted the MDRA that allows qualified taxpayers to exclude that “income”.
The law will end December 31st. You must close the short sale by then.
Other qualifications include:
· Good for up to $2,000,000 in forgiven debt.
· Only works for principal homes.
· The tax rule can be applied to debt used to refinance your home, provided the principal balance of the old mortgage, immediately before the refinancing, would have qualified.
See “The Mortgage Forgiveness Debt Relief Act and Debt Cancellation” for additional information. Use this link: http://tinyurl.com/5pe43f.
If you are upside down and are having problems making your payments, it’s time to do something. It’s going to take a long time before an upside down property becomes positive.
FEBRUARY MARKET STATISTICS
For fifteen months the median price for single- family, re-sale homes has been lower than the year before. But, in February, the median price was up 4% year-over-year.
Even better, the average price was up 11.9% compared to last February, reflecting that more $1MM+ homes are selling.
Home sales were down 3.4% year-over-year. Condo sales were down year-over-year by 3.9%.
The median price for condos was up 5.1% compared to last February.
Inventory of both homes and condos continues to be weak. Home inventory was down 23.3% compared to last February: 1,389 homes actively listed. Condo inventory was down 70.8% year- over-year.Pending home sales were up 22.9% year-over- year. Condo pending sales were up 12.8% year- over-year.