Most Markets Near Peak;

No Signs of Bubble, Home prices in most U.S. housing markets are reaching their 

peak, but there’s no need to fear a repeat housing bust, according to a new joint analysis by Florida Atlantic University and Florida International University. Throughout the majority of the country, home prices have been rising steadily since 2012, and there are signs the runup may be starting to slow.

“Housing markets are slowing, suggesting that we are nearing a peak in housing markets around the U.S.,” says Ken Johnson, a real estate economist at Florida Atlantic University. “But this is good news, as we are pulling back from the brink, unlike we did in 2007.”

Mortgage Rates Push Higher
Home buyers who are concerned about rising rates may want to lock in with a lender, which guarantees the current rate for a set period of time. Still, don’t let your clients linger on making a decision. It typically costs several hundred dollars to lock in a rate.

 Researchers at the universities created the Beracha, Hardin & Johnson Buy vs. Rent Index, which shows that out of 23 metros areas studied, 13 are slightly to moderately in “buy” territory. That means owning a home is more favorable than renting for the majority of residents in that area. On the other hand, 10 metro areas were slightly to moderately in “rent” territory.

“Our data indicates that prices are above their 40-year trend but not significantly so, as they were in 2007,” says Eli Beracha, co-creator of the index and associate professor in the Hollo School of Real Estate at FIU.

“Rather than a crash, I anticipate slower growth in prices accompanied by longer marketing times for sellers and increasing inventories, which should bring prices back in conjunction with their 40-year trend.”

Where Homes Are Flying Off the Market

Ready? Get set? Let's first go look at those boiling-hot metros where homes spendthe least time on market. Why do home buyers and sellers 

 alike track days-on-market stats every bit as obsessively as money managers fixate on the Dow, baseball fans on weight-on-base averages, or 'Bachelor' fans on ambush breakups? Well, it all depends on which side of the sales aisle you're on. 

Sellers, of course, want their homes to move to closing as quickly as possible, maybe even spurring a sweet price war en route. Buyers, on the other hand, are eager to avoid said price wars and maybe even have a bunch of different homes to choose from.

But contrary to what you might assume from reading real estate news headlines,there are metro areas where homes aren't being snapped up at a breakneck pace.It's a big country, after all. So we got curious. What could we learn from how long homes spend on the market in different metros?

The realtor.com® team of data wizards set out to learn where 'For Sale' signs are coming down about as quickly as Tickle Me Elmo toys flew off the shelves circa 1996—and where abodes are taking the longest to sell. It turns out, those two opposing lists portray clashing versions of America's real estate market today.

3. Salt Lake City, UT
Median days on market: 38.2
Median list price: $372,450
Salt Lake City homes
People are flocking to Utah, particularly Salt Lake City, like luna moths to flame.

That’s probably because the economy is booming with one of the lowest unemployment rates in the U.S., ringing in at just 2.7% in December 2017, according to the U.S. Bureau of Labor Statistics. That's leading to plenty of transplants. The city is expected to gain an additional 600,000 residents over the next 50 years, according to a University of Utah research brief.

Pair that with a relatively low cost of living, compared with some of the other cities on our list, a great public transportation system, and nearby ski slopes, and you have yourself a great big shortage of homes for sale.

“Anything under $350,000 is selling pretty easily,”  She listed one home just outside the city limits for about $285,000. Within a few days, she had three offers at $300,000. “We have zero days on market with some places—no sign even goes out because it's already gone.”

Buyers and sellers, take note(s)!
“That info can give home buyers an idea of how much competition they face, how limited homes are in the market, and how quickly they need to make a decision if they find a home they like,” says Chief Economist Danielle Hale of realtor.com.
And sellers can get a reality check about how long their home should spend on the market—if it's priced right and in good condition.

'It helps them get an idea of how long they have to move somewhere else,” Hale says. “In a really hot market, you can probably sell your home without making updates. But if you make updates, your home is more competitive.”

Nationally, the median number of days on the market is falling—there are too many buyers and not enough properties for sale, particularly in booming tech hubs. It hit a low of 60 days in the high-home-buying season of both May and June 2017, according to realtor.com data. That's down from 89 days in June 2012. (Our data go back only to May 2012.)

To figure out where these home-buying headaches are the worst (or are relatively painless), we looked at the median number of days that for-sale homes in the 300 largest metros spent on market from February 2017 through January 2018.* We limited our rankings to just one metro per state to ensure some geographic diversity.

Where They're Lingering Longest
Rounding out the metros with the fewest median days on the market are Portland, OR (44.3); Boise, ID (46); Sioux Falls, SD (46.8); Omaha, NE (47.2); and Minneapolis (47.3).
Need to slow down a bit? Let's take a look at the other end of the market, where homes are taking the longest to sell.
Take your time: Where homes sit on the market the longest

5 Sweet Tax Deductions When Selling a Home

Did You Take Them All? Are there tax deductions when selling

 a home? You bet—and they can amount to sizable savings when you file with the IRS. So whether you're selling your home soon or sold it last year, you'll want to know all the tax deductions (not to mention tax exemptions or other write-offs) at your disposal.

Here's a rundown of everything you need to know, plus a preview of what's in store once the new tax code takes effect next year.

1. Selling costs

“You can deduct any costs associated with selling the home—including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville Center, NY.

This could also include home staging fees, according to Thomas J. Williams, a tax accountant who operates Your Small Biz Accountant in Kissimmee, FL.

2018 tax changes: These deductions are still allowed under the new tax law.

2. Home improvements and repairs

Did you renovate a few rooms to make your home more marketable? Super—they probably helped you fetch a higher sales price, and now you can deduct those upgrade costs as well. This includes painting the house, repairing the roof or water heater, or anything that remains useful past a year.

But there’s a catch, and it all boils down to timing.
“If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” says Zimmelman.

2018 tax changes: None.

3. Property taxes

If you were dutifully paying your property taxes up to the point when you sold your home, you can deduct the amount you paid in property taxes for the time you owned it.

2018 tax changes: This deduction is still allowed, but your total deductions are capped at $10,000, Zimmelman says. You may be able to avoid this cap if you prepaid your 2018 taxes and if your property was assessed  in 2017, but estimated assessments won’t qualify.

4. Mortgage interest

As with property taxes, you can deduct the interest on your mortgage (up to a maximum of $1 million) for the portion of the year you owned your home.

2018 tax changes: New homeowners (and sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original $1 million amount, according to Zimmelman.

5. Moving expenses

If you sold your home in 2017 in order to move for a job change, you can deduct those expenses.

2018 tax changes: Lawmakers eliminated this deduction for most of us. However, members of the armed forces on active duty can still take the deduction.

But what's up with capital gains tax for sellers?

This one isn’t technically a deduction (it's an exclusion), but you’re still going to like it. As a reminder, capital gains are your profits from selling your home—whatever cash is left after paying off your expenses, plus any outstanding mortgage debt. 

And yes, these profits are taxed as income. But here's the good news: You can exclude up to $250,000 of the capital gains from the sale if you’re single, and $500,000 if married. The only big catch is you must have lived in your home at least two of the past five years.

2018 tax changes: None. Lawmakers tried to change this rule, but it managed to survive—so it’s still one home sellers can cherish. However, look for this to possibly change in a future tax bill.

Ralph DiBugnara, president of Home Qualified and vice president at Residential Home Funding, says lawmakers would like to change this so that homeowners would have to live in the property for five of the past eight years, instead of two out of five.
source: Realtor.com

Your Buying Power Just Increased

For the first time in five years, the Federal Housing Finance Agency (FHFA) significantly increased the maximum conforming loan limits to $453,100 — up from 2017's maximum of $424,100.  It's a change that just may help you reach your goal to buy a home.

The loan limit increases will help all buyers save money when getting a mortgage, especially those in high–cost areas, because a conforming mortgage generally has lower down payment requirements and offers a lower mortgage rate than a jumbo loan. Bottom line: you have more buying power in 2018.

And if you live in an area where a typical one–unit home costs more than the new loan limit, don't worry. Qualified borrowers who live high–cost areas can borrow more than $453,100.

This map shows the 2018 maximum loan limits across the U.S., including the counties where the loan limit ranges are higher. In Boulder County, CO, for example, the limit is $578,450. In Salt Lake City Utah, the limit is $600,300. Loan limits can be even higher in some areas.

House prices increased 6.8% on average between 2016 and 2017, according to FHFA. Raising the conforming loan limits helps keep housing affordable.

Freddie Mac and Fannie Mae can purchase single–family mortgages with loans up to the conforming loan limit. Loans above this limit are known as jumbo loans and generally have higher costs associated with them.

If you're in the market to buy a home, consider answering these five questions to determine if you're mortgage ready. 

Are you ready for homeownership? The decision to rent or buy is a personal one that depends on your financial situation, future plans and lifestyle. Buying may make sense if you plan to stay in your home for at least five to seven years and you’re interested in building long-term equity. And if you prefer a more personal touch, reach out to a Precision Realty & Assoc. LLC or CALL 801-809-9866 today.

Is It Last Call for Low Mortgage Rates?

All good things come to an end—even low mortgage interest rates. They've been steadily rising and are poised to climb even 

higher this year.
When they do, the cost of buying a home will rise as well. This could make the challenges of today's buyer's market even worse for some prospective purchasers—particularly first-time buyers, having to settle for smaller abodes, fixer-uppers (in the real sense, not the TV sense), and homes farther out where real estate is cheaper.

Some may even be priced out of the market altogether thanks to a toxic combination of soaring home prices and increasing mortgage rates.

After hitting historic lows, average mortgage rates have now reached their highest levels in more than four years. They hit an average 4.43% for 30-year, fixed-rate loans as of March 1, according to Freddie Mac data. This was the highest they've been since Jan. 9, 2014, when they were an average 4.51%.

They're expected to go up even more after the Federal Reserve raises short-term interest rates. The new Fed chairman, Jerome H. Powell, says the Fed is likely to gradually increase them this year. It is expected to bump up rates at least three times this year, in 0.25% increments, beginning this month.

'For the bulk of buyers, it's not going to kill their decision to purchase a home. If anything, it will get them off the fence by creating a sense of urgency,' Higher rates are 'a kick in the pants for you to start thinking seriously [about buying].'

Even a fraction of a percentage point rise quickly adds up. On a $300,000 house with a 30-year fixed mortgage and 20% down payment, the difference between 4% and 5% is $142 a month. That's more than $51,000 during the life of the mortgage.

'Buyers thought they could wait forever because rates were going to stay low forever,'says Palacios. 'They're starting to realize if they're going to buy they should probably buy now.'

It's important to note that mortgage rates are still low. They averaged around 7% from the 1990s through the financial crisis, falling from a high of 18.63% on Oct. 9, 1981.They ped below 5% for the first time in March 2009, before bottoming out at 3.1% on Nov. 21, 2012.

And while they may not return to the 3% range anytime soon, it's also unlikely they'll go into the double digits.

“You should be paying close attention to what is going on in the marketplace,because those rates can move pretty quickly in a short amount of time,” says Freddie Mac's Kiefer. “

Source Realtor.com

Housing Markets Need Landlords to Sell

Buyers Are on the Hunt But They’re Not Buying

Contract signings posted a major setback in January, sinking to the lowest level in more than three years.

But it’s not from a lack of interest. Buyer traffic is reportedly up in most areas of the country in January, according to the latest housing report released by the National Association of REALTORS® on Wednesday.

Landlords own thousands of single-family homes across the U.S. With housing shortages abounding, some are calling on landlords to start selling. A slowdown in rent growth may convince more to finally unload their inventories.

“As new multifamily supply catches up with demand and slows rents, some large investors may begin putting their holdings of affordable single-family homes up for sale, which would be great news, particularly for first-time buyers.” 

Last week, NAR reported that contracts to buy previously owned homes dropped to their lowest level in more than three years in January. They cited low inventories of homes for sale to blame.  

In Supply-Starved Home Market, Can Wall Street Landlords Help?

A jump in apartment construction has slowed rent growth for many multifamily buildings across the country, but single-family landlords are still mostly reaping profits. Invitation Homes Inc., the nation’s largest single-family landlord, owns more than 80,000 properties.

It is forecasting its revenue growth to be about 4 percent to 5 percent in 2018, which far outpaces rent-growth projections for apartments, according to Green Street Advisors LLC, a research firm.

“Single-family rental top-line growth should continue to fare much better than that of apartments due to steady demand and limited impact from competitive new supply,” Green Street Advisors note in a recent report.


Source: Bloomberg (February 28, 2018)

Could Deregulation lead to Manufactured Housing Boom?

Can Manufactured Housing Ease America’s affordable, 

The federal government may increasingly be eyeing manufactured housing as one potential solution to ease shortages of affordable homes across the country. 

Mortgage financing giants Fannie Mae and Freddie Mac announced plans in January to purchase more manufactured housing loans over the next three years.

Further, the U.S. Department of Housing and Urban Development recently announced it is reviewing regulations surrounding manufactured housing. 

Manufactured homes are built in a factory and then relocated to a home site. They differ from prefab homes, which have parts made in a factory but are then mostly constructed on-site. Manufactured homes, once referred to as mobile homes, often cost a fraction of median price of a new single-family home, such as $45,000 versus $323,000, respectively.

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“There’s clearly an affordable housing gap that’s growing and growing and growing,”  “Manufactured housing is every bit as good as site-built housing in most cases. Why has the number of manufactured housing units not gone up to where it was before?”

Financing a manufactured housing has grown more difficult since the 1990s. Defaults on manufactured housing loans piled up in previous years, and lenders faced the difficulty of repossessing a manufactured home. The sector has largely struggled to recover ever since.

Mobile homes are classified as either a real estate property or personal property.Buyers can finance a purchase through a traditional mortgage if the property is classified as real estate. However, the majority of manufactured loans are financed as personal property with a chattel loan, which usually come with high rates and shorter loan terms.

Further, a challenge of mobile homes is that they tend to depreciate in value, unlike site-built homes. Also, zoning restrictions and the “not in my backyard” attitude hampers the growth of these communities.

Fannie Mae plans to purchase around 30,000 manufactured housing mortgage loans over the next three years. It is also working on developing a pilot program for purchasing chattel loans and supporting the financing of manufactured housing communities.

A professor of land use law at Washington University in St. Louis, also believes HUD’s review of building regulations with manufactured housing could play a role in possibly helping to destigmatize the housing sector.  

“If they start working on a model state [zoning] law and start funding pilot projects, that would bring some attention,”  “I think that would be very helpful.”