Evansville Home Sales Prospects: Anything But "Calm"!

Last week, Evansville home sellers saw more than the usual number of reasons to look forward to this spring’s local home sales selling season. It looked like the opposite of the lengthy real estate “Perfect Storm” that caused freefall across the national landscape.

Signs pointed to the possibility that we may be headed into the opposite market conditions. Webster’s Dictionary says the opposite of ‘storm’ is ‘calm’ – but I don’t think you would callEvansville’s home sales outlook a “Perfect Calm.” Far from it!

Some of the signs:

- Falling Inventory. Per the NAR’s Existing Home Sales Report, there’s a nation-wide shortage of total inventory. By the end of January, it had fallen another 4.9%: lowest in seven years. Raw unsold inventory hasn’t been this low in 14 years! Our current month’s inventory is 7.13 months, meaning it would take 7.13 months to sell all listings.

- Rising Demand. Per last week’s National Association of Home Builders’ News and Alerts bulletin, “housing demand continues to return.” NAR Chief Economist Lawrence Yun, pointing to buyer traffic that is up 40% over a year ago, states flatly, “We’ve transitioned into a seller’s market in much of the country.”

- Buyer Attitude. Also last week, the Conference Board’s Consumer Confidence Index showed a rebound from January. The ‘Present Situation’ index rose sharply (from 56.2 to 63.3). This remains the only less-than-stellar point of contention, I think one area could be a tipoff to gathering strength: the proportion of those expecting their income to rise is now growing, those expecting the opposite, falling.

If this spring turns out to be the opposite of a Perfect Storm for local home sales, will conditions improve further? Should sellers wait? The falling inventory measure might suggest otherwise. If the NAR’s appraisal is correct, now that these trends are consolidating, “…it would seem likely more inventory would come to market.”

If you are a local home seller who’s been waiting and watching for the right moment to enter the Evansville home sales listings, I hope you will consider giving me a call soon. You can reach me on my cell phone 812-499-9234 or email at Rolando@RolandoTrentini.com

Evansville Real Estate News Letter for March 2013

Market Watch

This month I want to recap the local real estate market in 2012 compared to 2011. This is especially easy since our market improved in virtually every category last year.

The easy place to start is closed transactions. Our BLC (broker listing cooperative, which used to be called MLS) closed 4,387 home sales last year up 8.83% from 2011. The median sales price increased 4.4% increasing our average sales price to $125,971. Days on market decreased 11.3% compared to 2011 but is still higher than I like, at 105 days.

The big news, which I have mentioned frequently over the past year, is that the months supply of homes listed for sale continues to decline. The average for 2012 was 7.32 months down from 8.70 months in 2011 and 9.43 in 2010. This is the lowest average level in 6 years. As of today there are fewer than 2,400 active listings on the market. My records do not go far enough back to find fewer active listings than this. If you are considering selling your home, now is the time to list. I am confident that new home construction will increase significantly this year. Homes listed now will reach the market before these new homes are completed and on the market.

If you are considering listing your home, no one has better tools to market your home. Traffic on FCTuckerEmge.com and Tuckermobile.com are higher now than they have ever been. In fact, visits to FCTuckerEmge.com for the first two months of the year are up almost 11% versus the same time last year. With over 95,000 visits, FCTuckerEmge.com is the source for information on real estate in our area. And don’t forget that TuckerMobile.com is always with you on your smart phone!

Please let me know if you know of anyone considering selling their home. I would be happy to prepare a market analysis and help them sell their home.

Suddenly Gripped by the Surprise Remodel

Sometimes home values can undergo abrupt changes. One way that can happen is through the ‘Surprise Remodel’ phenomenon. That’s when you wake up one morning to find that your local house grew larger…overnight!

If you are one of the many residents whose children have left for school, the Surprise Remodel is what happened the moment you realized that that you were, in fact, suddenly in possession of an extra room.

Sometimes it takes a few months, but as soon as you conclude that the sentimental value of leaving the high school memorabilia in place is outweighed by the value of transforming the room into more useful space, you have a number of ways to proceed:

Workout Area

Transforming the former kid room into an exercise area is one foolproof way home values can be increased. Remove carpeting and add flooring as needed; place a floor-to-wall mirror to one side; then add any exercise equipment you choose (garage sales can be excellent sources).

Office Space

Have you always wanted a dedicated home office? Now is the ideal time. Paint the room a rich neutral color, add the desk (freeing up space it used to occupy elsewhere), and then add bookshelves and a guest chair or sofa. Voila!

Guest Room

In the likely event the kids will be back now and then, a subtler changeover to a universal guest room is a good answer. Memorabilia removal will go a long way toward accomplishing that goal, and home values always improve when fancier bedding and pillows are added to any room.

Evansville home values may not seem important until you decide to put your own on the market, but I have often heard clients say they wish they had spruced up the place while they were still living there. Any Surprise Remodel moment is a perfect opportunity to do just that.

Later, when the time comes to list, don’t forget to call me! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com

3.8% Tax: What's True, What's Not

Rumors about the 3.8% Medicare tax continue to circulate. Here's the definitive word on what's true and what's not on how the tax impacts real estate.

Ever since health care reform was enacted into law more than two years ago, rumors have been circulating on the Internet and in e-mails that the law contains a 3.8 percent tax on real estate. NAR quickly released material to show that the tax doesn’t target real estate and will in fact affect very few home sales, because it’s a tax that will only affect high-income households that realize a substantial gain on an asset sale, including on a home sale, once other factors are taken into account. Maybe 2-3 percent of home sellers will be affected.

Nevertheless, the rumors persist and the latest version that’s circulating falsely say NAR is advocating for the tax’s repeal. But while NAR doesn’t support the tax (it was added into the health care law at the last minute and never considered in hearings), it’s not advocating for its repeal at this time.

The characterization of the 3.8 percent tax as a tax on real estate is an example of an Internet rumor, says Heather Elias, NAR’s director of social business media. Elias and Linda Goold, NAR’s director of tax policy, sat down for a discussion of how the tax works and how Internet rumors work and you can find their remarks in the 6-minute video below.



Goold says the tax will affect few home sellers because so many different pieces must fall into place a certain way for the tax to apply. First, any home sale gain must be more than the $250,000-$500,000 capital gains exclusion that’s in effect today. That’s gain, not sales amount, so you really have to reap a substantial amount for the tax to even come into play. Very few people are walking away with a gain of more than half a million dollars today, even in the high-end home market, so right off the bat only a few home sellers would be a candidate for the tax.

For the few households that do see a gain of more than the $250,000-$500,000 exclusion (that’s $250,000 for single filers and $500,000 for joint filers), only the amount above the exclusion would be factored into the tax calculation, and that would still only apply to high-income households, which the law defines as single people earning $200,000 a year and joint filers earning $250,000 a year.

So, if you are a households with annual income of $250,000 or more and you earn a gain of more than $500,000 on your house (again, that’s after the $500,000 exclusion), any amount of gain above the exclusion would be plugged into a formula to see if it’s taxable. If it turns out that it’s taxable, then the amount could be subject to the 3.8 percent tax. If the household had a gain of more than $500,000 but only earned $249,000 a year in income, the tax wouldn’t apply.

(Note that these are just hypothetical examples. To know if a case would really be subject to the tax, a professional tax preparer or tax attorney has to look at all the particulars of the tax filer’s case. Only a tax professional is in a position to say the tax is applicable, but the examples cited here could help you get a sense of how the tax works.)

The other thing about the tax worth noting is that, although it takes effect in 2013, any impact on taxes wouldn’t happen until 2014. That’s because the tax filer would do the calculation in 2014 for the 2013 tax year. Because it’s not a tax on a real estate sale but rather on a capital gain, it’s not calculated at the time of an asset sale, whether that asset is a house or something else. It’s calculated at the time the filer figures his or her tax.

This is all explained clearly in the video, so if you have questions about how the tax works, or if you’re still hearing rumors about the tax and you’re not certain of the accuracy of what you’re hearing, the video should prove helpful.

Source: http://realtormag.realtor.org/news-and-commentary/feature/article/2012/10/38-tax-whats-true-whats-not

How Big of a Threat Are Sinkholes?

Sinkholes are a lot more common than many home owners realize—particularly in Florida, according to CoreLogic, a real estate analytics firm.

A Florida man is presumed dead after a large sinkhole engulfed his entire bedroom last week, capturing headlines across the country. The incident has prompted many home owners wonder if a sinkhole is a threat to their homes too.

In a CoreLogic analysis, Florida appears to be most at risk for sinkholes, with 15,000 verified sinkholes. Pasco County—along the West Coast of Florida—has about 6,000 of those sinkholes, according to CoreLogic.

"It's important to note that not all sinkholes are prone to a sudden collapse like this, and they all obviously represent various levels of risk to people in the area," CoreLogic writes. "It's also interesting to know, however, that general homeowners insurance often does not cover sinkhole losses."

Source: “CoreLogic: Sinkholes More Common, Costly than Home Owners Realize,” HousingWire

Buyers Camp Out to Try to Snag New Homes

About 30 home buyers — all pre-qualified — have lined up in tents and camped out in order to be first in line for an opportunity to buy a new home in Huntington Beach, Calif. The homes are still under construction by Brightwater Capri development and are priced between $800,000 and $900,000.

The first home in the new development still doesn’t go on sale until March 2. Five homes are set to be released this weekend. Only pre-approved buyers on a first-come, first-served basis will be able to preview the homes.

The homes feature four bedrooms, ocean views, and range from 1,992 to 2,685 square feet. Buyers have 11 floorplans to choose from.

"If you want the opportunity, you gotta make the sacrifice," says Terry Torline, a hopeful buyer who is camping out. "Based on what's out there in the marketplace, it's a good deal right now."

Source: “Huntington Beach Homebuyers Camp Out for Chance at New House,” AOL Real Estate

For Sale by Owner' Deals Need Local Agent Knowledge

Suppose you are driving past one of those ‘For Sale by Owner’ yard signs…and the house looks good!

 Do you screech to a halt, jump out and rush up to the front door to – quick! – sign a deal? More likely, you jot down the phone number (hopefully one is visible, though with For Sale By Owner signs, it’s not always the case) so you can call up your agent to get the details.

Veteran buyers considering a local For Sale by Owner (FSBO) property know why it’s highly beneficial to use their agent from the start. Even if you have found the home yourself, you should want that first call to go to an agent.

Here’s why:

·         Agents offer advanced relationships that stand to improve your bottom line. For example, timing often can make or break a deal, and agents can utilize their network of the Evansville lenders who have proven most reliable. Agents are also likely to have vetted referrals for specialized services to address fireplace and chimney issues, drainage, asbestos removal, etc.

·         Agents are experienced negotiators whose familiarity with local real estate requirements strengthens your position vis-à-vis credits and repairs. Agents understand potential issues likely to come up at inspection -- and can help you evaluate each item in your inspection report.

·         Some buyers believe they can save money by not using an agent in localFor Sale by Owner transactions. Sometimes that happens, but more often than not, it’s the FSBO owner whose heart is set on pocketing that extra 2.5 – 3%. Agents can save you money in other ways -- by negotiating a lower selling price, proposing intangible benefits (like cash for closing), etc.

Circumstances differ, but the bottom line value an experienced agent adds is a clear understanding of the complications and issues that often arise during dealings – whether ‘For Sale by Owner’ or not.   To get to closing, be sure your agent is involved. And if you’re looking for an agent, I would love to help – call me today to discuss how I will help! You can reach me on my cell phone at 812-499-9234 or email Rolando@RolandoTrentini.com