Monthly Archives: August 2015

Pending Home Sales Inch Forward in July

The Pending Home Sales Index, a forward-looking indicator based on contract signings, marginally increased 0.5 percent to 110.9 in July from an upwardly revised 110.4 in June and is now 7.4 percent above July 2014 (103.3).

Pending home sales — sales where the contract has been signed but the transaction has not yet closed — were mostly unchanged in July, but rose modestly for the sixth time in seven months, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, says the housing market began the second half of 2015 on a positive note, with pending sales slightly rising in July.

“Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer,” he said. “While demand and sales continue to be stronger than earlier this year, Realtors® have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust.”

Looking ahead, with inventory shortages likely to persist into the fall, Yun expects the national median existing-home price to increase 6.3 percent in 2015 to $221,400. Yun forecasts total existing-home sales this year to increase 7.1 percent to around 5.29 million, about 25 percent below the prior peak set in 2005 (7.08 million).

“In light of the recent volatility in the stock market, it’s possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment,” said Yun. “Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing — albeit at a modest pace — and the labor market continues to add jobs.”

Adds Yun, “Uncertainty in the equity markets — even if the Fed raises short-term rates in September — could stabilize long-term mortgage rates and preserve affordability for buyers.”

REALTORS® Ensure South Carolina Coastal Homeowners Protected

With rising homeowner insurance rates and fewer insurance companies willing to write policies for coastal properties, South Carolina property owners found themselves facing an insurance disaster.

Enter the South Carolina Association of REALTORS®: South Carolina’s new Competitive Insurance Act is the direct result of local REALTORS® banding together to fight for homeowner rights.

Using the strength of local real estate advocates and the financial backing of the national association, REALTORS® lobbied the state legislature for years for a more competitive and transparent insurance marketplace. This year, all of their hard work paid off.

The Competitive Insurance Act was approved, and it will provide $1.6 million additional funds for the Safe Home South Carolina Program—a program charged with helping homeowners retrofit their homes against hurricane and hard wind damage.

The state’s Department of Insurance must now hold annual public hearings for those in the coastal region and prepare an annual report to the South Carolina General Assembly, and under the new law, the department must assist property owners in their search for affordable insurance premiums and deductibles, as well.

It also must initiate a multimedia campaign to raise awareness about the South Carolina Safe Home program, which provides grant money to individual homeowners to make their property hurricane and high-wind resistant. The funds are strictly designed to help single-family homeowners retrofit their residences for safety purposes.

Thanks to the tireless work of REALTORS®, South Carolina homeowners can get what they deserve: a fair shake on insurance.

Chrystal Caruthers contributed to this article.

REALTORS® Protect Arizona Privacy Rights

Arizona

Photo of the Arizona Capitol. In 2014, AAR supported legislation that secured privacy rights for homeowners.

Thanks to a new Arizona law co-sponsored by State Representative Michelle Ugenti and State Senator Gail Griffin—both REALTORS®—condominium and townhouse associations can no longer restrict individual unit owners from renting their units based on a criminal background check.

The new law, which took effect in July 2014, prohibits criminal background checks for condo rentals. It also limits the amount of information the association can legally obtain about renters.

Passed in an omnibus bill signed in April by Arizona Governor Jan Brewer, the law also provides protections for tenants and allowances for unit investors.

REALTORS® in Arizona supported legislation to limit homeowners associations (HOAs) from requiring renters’ private information like Social Security numbers and credit reports—and charging steep processing fees, up to $250 in some cases.

Before the law, Arizona homeowner associations were allowed to require every owner to sign a “crime-free addendum” and make criminal background checks mandatory. It restricted those with criminal backgrounds from moving into some condo communities.

The new law strips homeowner associations of that power.

Here is a list of some of the new homeowner association statutes:

  • No required disclosure of any information regarding a tenant other than the name and contact information of all adults occupying the unit, term of lease, and the license plate number of the tenant
  • Limits the amount a homeowner’s association can charge to no more than $25 for administrative fees for each new tenant
  • Allows non-occupant owners to serve on the board of directors
  • Prohibits associations from requiring a copy of the tenant’s credit report, rental application, lease agreement, rental contract or any other personal information about the tenant
  • Directs a unit owner to abate criminal activity
  • Allows email and fax votes to count towards a quorum for non-present owners
  • Allows unit owners to display political signs on their property
  • Allows unit owners to use a crime-free addendum as part of their lease

The new law does allow homeowner associations to restrict occupancy in the case of a convicted sex offender, however.

Homeowners—and renters—in Arizona can thank REALTORS® for their efforts in securing privacy rights.

Chrystal Caruthers contributed to this article.

How Could Congress Lengthening Property Depreciation Rules Affect Your Wallet?

Fast Fact: Depreciation encourages investment in real estate, but that could change if Congress extends the depreciation time periods.

The current rules of depreciation in the U.S. Tax Code are out of date in today’s fast-paced world.

Those rules say you must depreciate residential investment property over a period of 27.5 years or 38 years for commercial property.

That’s just too long in today’s world where advances in technology and construction quickly make something that was state of the art a few years ago practically worthless today.

Depreciation times need to be shortened. 18 and 30 years are more realistic in today’s world. But, incredibly, some members of Congress want to extend them instead.

Depreciation not only encourages investment in real estate, but it also encourages making capital improvements — improvements to keep rental homes, apartments, shopping centers, office buildings, and other properties we use up-to-date, safe, and modern.

Tell Congress real estate depreciation rules need to be shortened to fit today’s fast-paced reality.

More on this topic



Kansas Mortgage Fee Being Phased Out Thanks to REALTORS®

Everyone wants lower taxes, and now Kansas state residents will have them.

The Kansas mortgage fee is being phased out, thanks to the lobbying efforts of the Kansas Association of REALTORS® and the National Association of REALTORS®.

The tax will officially end in 2019.

The tax is calculated on the amount of the mortgage, so this saves homebuyers 26 cents on every $100 borrowed — or $520 on a $200,000 purchase.

Whether a house costs $200,000 or $1 million, the actual costs to record the document are the same.

The registration fee was only charged to those buying property with a mortgage: cash buyers were not charged the transfer tax. REALTORS® argued the tax unfairly discriminated against people who needed a mortgage, and the courts agreed.

Kansas has the distinction of being the only state in the nation to repeal an existing real estate transfer tax. It becomes the 15th state in the nation with no real estate transfer tax.

The National Association of REALTORS® has now assisted five states in banning real estate transfer taxes since 2007.

Chrystal Caruthers contributed to this article.