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Welcome to our blog! Check back here often to get the latest in local and national real estate news, statistics, and discussions. Click here to subscribe to our RSS Feed.

Is a 3.8% Sales Tax on Investment Income Applicable to Your Clients?

Beginning January 1, 2013 a new 3.8 % tax on some investment income will take effect. This tax was passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund President Obama’s health care and Medicare overhaul plans. There is a common misconception that this tax will apply to all real estate transactions, therefore the National Association of Realtors has put together an informational guide for REALTORS® to clearly understand the tax and how it could impact their clients. Because of the complex nature of the tax, it is difficult to predict how it will affect every buyer or seller. To view the brochure containing different scenarios in which this tax could be relevant to clients see The 3.8% Tax Real Estate Scenarios & Examples.

Although existing home sales increased in July, the bigger story should be focused on the shrinking inventory of homes available for sale nationwide.   Each month details listing information statistics from 146 markets.   Just two of the 146 markets had a year-over-year increase in the number of listings - with all 144 remaining markets showing a decline.

The July data show that overall, the number of listings is down slightly more than 19 percent in the U.S. as an aggregate.  The total US for-sale inventory of single family homes, condos, townhomes and co-ops remained at historic lows, with 1.866 million units for sale in July 2012.  The largest year-over-year declines in the number of listings saw drops of more than one-third in the total number of listings and eight of the top 10 were located in California. 

In 67 of the markets, the year-over-year decline in listings was more than 20 percent, while 130 had reductions of at least 10 percent. 

How did Austin Rank?

  • 38th highest median price increase out of 146 with $242,500
  • 27th largest year-over-year price increases with 7.82%. The highest YOY increase was Santa Barbara with a 31%.
  • 100th lowest decrease in YOY inventory. There were 99 markets that have seen a greater decrease in their inventory for this year vs. this time last year. Oakland, CA had the largest decrease in inventory with 59%.
  • The median age of Austin’s inventory (roughly similar to Days on Market) was 61 days which ranks us the 21st out of 144 markets for the “youngest” inventory which is a 20% decrease from this time last year. As agents can attest in Austin, many MLS areas had a much smaller average days on market.

Low inventories, combined with rising list prices and lower times on market, are positive signs that the overall market is improving - nationwide.

This is a personal story:

This topic falls into the category of a personal and recent experience. Although I saw the story this week, several months ago we had our dryer serviced for the first time in it’s long life of doing laundry for a two teenage boy family only to have the maintenance employee take apart our dryer and show us how close we were to burning down our house. The pictures below are eerily similar to what our dryer looked like… except ours had singe marks where small amounts of lint had already flamed up several times. It only took a short while to vacuum out all of the offending lint and apparently we were good to go. Someone who reads this is going to have their dryer checked, find the same thing and prevent a fire.

Clothes Dryer Fires Cost $35 Million a Year

August 20, 2012

An estimated 2,900 clothes dryer fires in residential buildings are reported to U.S. fire departments each year and cause an estimated $35 million in property losses, according to a new government report.

The report by the U.S. Fire Administration (USFA) said that 84 percent of clothes dryer fires took place in residential buildings.

Also, according to the report:

  • Clothes dryer fire incidence in residential buildings was higher in the fall and winter months, peaking in January at 11 percent.
  • Failure to clean (34 percent) was the leading factor contributing to the ignition of clothes dryer fires in residential buildings.
  • Dust, fiber and lint (28 percent) and clothing not on a person (27 percent) were, by far, the leading items first ignited in clothes dryer fires in residential buildings.
  • Fifty-four percent of clothes dryer fires in residential buildings were confined to the object of origin.

The report, “Clothes Dryer Fires in Residential Buildings,” examines characteristics of clothes dryer fires in residential buildings and was developed by USFA’s National Fire Data Center, based on 2008 to 2010 data from the National Fire Incident Reporting System (NFIRS).

Damaging fires can occur if clothes dryers are not properly installed or maintained.

The report notes that lint, a highly combustible material, can accumulate both in the dryer and in the dryer vent. Accumulated lint leads to reduced airflow and poses a fire hazard.  Reduced airflow can also occur when foam-backed rugs or athletic shoes are placed in dryers.

Small birds or other animals nesting in dryer exhaust vents is another hazard. A compromised vent will not exhaust properly, possibly resulting in overheating and/or fire.

Source: USFA

Clothes Dryer

Freddie Mac reported rates are the lowest since the government-sponsored enterprise began keeping records in 1971. Today's average 30-year rate is even lower than the average 20-year or 25-year rate, which was the typical loan in the 1950s. Data from the National Bureau of Economic Research showed that between July 1950 and February 1951, long-term rates averaged 4.08 percent. This week's average 30-year rate was 3.78 percent. Mortgage rates tend to track the yield on the 10-year Treasury note, which is approximately 1.74 percent and that rate is the lowest level since the Federal Reserve Bank started keeping daily records in 1962. While it’s hard to imagine rates going lower (BUY NOW!  REFINANCE NOW!) a WSJ article points out that "Yes, interest rates can go lower".

The average annual interest rates have dropped each year for the last 5 years and are now again lower for 2012!

  • Average Interest Rate for YTD 2012 is 3.95%.
  • Average Interest Rate for 2011 was 4.45%.
  • Average Interest Rate for 2010 was 4.69%.
  • Average Interest Rate for 2009 was 5.04%.
  • Average Interest Rate for 2008 was 6.03%.
  • Average Interest Rate for 2007 was 6.34%.


About the “Primary Mortgage Market Survey® (PMMS®)
Freddie Mac's Primary Mortgage Market Survey® (PMMS®) surveys lenders each week on the rates and points for their most popular 30-year fixed-rate, 15-year fixed-rate, 5/1 hybrid amortizing adjustable-rate, and 1-year amortizing adjustable-rate mortgage products. The survey is based on first-lien prime conventional conforming mortgages with a loan-to-value of 80 percent. In addition, the adjustable-rate mortgage (ARM) products are indexed to U.S. Treasury yields and lenders are asked for the both the initial coupon rate and points as well as the margin on the ARM products. Currently, about 125 lenders are surveyed each week and the mix of lender types – thrifts, credit unions, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide. The survey is collected from Monday through Wednesday and the results are posted on Thursdays.

For all Loan Officers…try out Gracy's Fee Quote System

US Existing Home Sales, on a Seasonally Adjusted Basis, have increased for 11 straight months. If you exclude the increase caused by the government tax credit, this is the first time since late 2005 for the US to experience a similar sustained increase in sales.

Other highlights:

  • April existing home sales rose 3.4 percent from March 2012 and were up 10 percent from April 2011, now at a Seasonally Adjusted Annualized Rate (SAAR) of 4.62 million
  • Median home prices increased 3.1 percent from March 2012 and 10.1 percent from April 2011 (12 month moving average was up 1.1 percent year-over-year
  • Inventory is down 28.4 percent in the past 12 months, though it rose slightly sequentially from March, and currently rests at 2.54 million units for sale