Category Archives: Mount Kisco

Obama Scorecard warns economy remains fragile | Bedford Hills NY Real Estate

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Data released in the Obama administration’s January Housing Scorecard show signs that the housing market is continuing to strengthen, with the number of underwater borrowers  declining while home prices improve. 

Officials warn that, while the recovery is in full effect right now, there is regional variation and the overall U.S. economy still remains fragile.

“The Obama administration’s efforts to speed housing recovery are showing continued progress as the January scorecard indicators highlight clear forward momentum in the housing market,” said the U.S. Department of Housing and Urban Development Deputy Assistant Secretary for Economic Affairs Kurt Usowski.

Broken down, the housing recovery looks promising. The inventory of existing homes for sales continued to decline, dropping from a 4.8 months’ supply on the December scorecard to a 4.4 months’ supply, according to data from the National Association of Realtors. The significance of this is highlighted when looking back at the November scorecard, when there was a 5.3 months’ supply of housing.

With fewer homes on the market, fewer homes are being sold. The number of existing homes for sale dropped from 415.8 million in December to 411.7 million in January, according to NAR, U.S. Census Bureau and HUD. 10.67

The number of underwater borrowers continues to be chipped away, with 10.67 million borrowers still underwater, down from 10.78 million in the previous quarter, according to the CoreLogic ($28.50 0.2%).

Mortgage aid continues to keep foreclosure fillings down, with 3.2 million foreclosure completions since April 2009, according to RealtyTrac.

“The housing market has clearly bottomed out nationally and is turning a corner with new home construction increasing to a level not seen since June 2008 and home prices showing strong annual gains. But with so many households still struggling, we have important work ahead,” added Usowski.

mhopkins@housingwire.com

via housingwire.com

6 ways to increase your chances of being audited | Mt Kisco Realtor

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Now that we’ve entered the tax filing season, many taxpayers’ thoughts naturally turn to the subject of IRS audits. What are the chances you’ll be audited by the IRS? It depends.

The overall audit rate is low. In 2012 only 0.94 percent of all individual taxpayers with incomes under $200,000 were audited. Taxpayers with incomes of $200,000 to $1 million were audited at a 3.7 percent rate.

However, there are a number of ways to greatly increase your audit odds. Here are six:

1. Be a real estate professional

There are no statistics available on how often real estate professionals are audited, but anecdotal evidence indicates they are in the IRS’ crosshairs. This is particularly true for real estate pros who own rental property and claim rental losses.

Unlike everybody else, real estate professionals can be exempt  from the passive loss rules that greatly limit the ability to deduct rental property losses from other nonrental income. If you claim such losses, the IRS will take more interest in your return.

This is especially likely if you have a full-time job and also claim to be a real estate pro. The IRS is highly skeptical that people who have day jobs can put in enough hours in real estate to qualify as a real estate professional for tax purposes.

2. Claim 100 percent business use of your only vehicle

Another way to greatly increase your audit chances is to claim that you use a vehicle 100 percent for business when you own only one vehicle. When you claim the business mileage deduction on Schedule C you are specifically asked how many cars you own. If you own only one, the IRS is not going to believe you use it exclusively for business.

3. Claim large travel and entertainment deductions

Large travel and entertainment deductions invite scrutiny by the IRS. Historically, these have been some of the most abused deductions by taxpayers. As a result, the record keeping requirements for them are particularly stringent. Remember, you can deduct entertainment or meals only if there is a business purpose for the expense.

4. Large charitable deductions

You’ll invite IRS scrutiny if your charitable deductions are disproportionately large compared to your income. Also, remember that you must file IRS Form 8283 if you claimed a total deduction of more than $500 for all donations of property. You’ll need to get an appraisal if you claim a deduction of $5,000 or more for a single item.

5. Claim ambiguous or general expenses

Listing expenses under vague categories such as “miscellaneous” or “general expense” invites IRS scrutiny. Be specific. IRS Schedule C lists specific categories for the most common small-business expenses. If an expense doesn’t fall within one of these classifications, create a specific name for it.

6. Fail to report all of your income

IRS computers compare 1099 forms that self-employed real estate pros receive with their tax returns to determine whether there are any discrepancies. If there are, you’ll be contacted by the IRS.

 

via inman.com

 

Consumer confidence breaks darkness surrounding housing | Mt Kisco Real Estate

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Higher home sales and growing optimism on the jobs front are further signs of a stabilizing real estate market, Fannie Mae concluded Thursday. 

“Concerns about job loss are waning as payrolls are growing – a trend that may give potential homebuyers more confidence that they can meet the financial obligation of homeownership,” said Doug Duncan, chief economist for Fannie Mae. 

The government-sponsored enterprise released the results of its January 2013 National Housing Survey.

After polling just over 1,000 Americans, Fannie Mae concluded more survey respondents believe now is a good time to sell a home, with 23% responding favorably to that question, up from 11% last year.

Expectations around personal finances remain flat, while projections for consumer home prices and rental and ownership properties are at their highest levels in two-and-a-half years.

About 41% of respondents believe prices will rise in the next 12 months, down 2 percentage points from December’s survey high.

Those who believe prices will continue to drop reached a low of 10%. Forty-one percent of respondents expect mortgage rates to tick up in the coming year.

Americans also see rental prices rising alongside property values, with 50% predicting an uptick in rental prices in the next 12 months.

The good news is homeownership is still a valued endeavor, with 65% of surveyed Americans saying they would buy if moving in the near future.

via housingwire.com

Using home inspection report as negotiation tool | Mt Kisco NY Real Estate

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We are buying a house. The home inspection is scheduled for next week, but we’re not sure what to do once we get the report. Is the inspection report just for our information or can we use it to negotiate with the sellers? Can we walk away from the deal if we don’t like the report or are we obligated to go ahead with the purchase? What can you tell us about this? –Alan

DEAR ALAN: A home inspection empowers you with essential options as a buyer, but with some limitations. In the majority of home sales, the deal is contingent upon the buyers’ acceptance of the home inspection report. This means that you, as buyer, have a specified number of days to accept or decline the property in “as is” condition. If you decline acceptance, you have four basic choices:

1) Ask the sellers to make a few repairs.
2) Ask the sellers to make many repairs.
2) Ask the sellers to reduce the sales price.
3) Decline to purchase the property.

If you request repairs or a price adjustment, based upon the home inspection report, the sellers also have choices.

via inman.com

This Is Housing Bubble 2.0: David Stockman | Mt Kisco Real Estate

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Many have named a U.S. housing recovery as a bright spot in a so-called broader domestic economic recovery.

And data seems to support this analysis, despite a slowdown in sales momentum at the end of the year. Existing home sales in December were up 12.8% from the same time in 2011, with the total number of sales in 2012 rising to the highest level in five years, according to the National Association of Realtors. Meanwhile, the annual price for existing homes also jumped to the highest level since 2005, with the median price of a home up 11.5% in December from the same period in 2011.

 

But David Stockman, former director of the Office of Management and Budget in the Reagan Administration sees little to get excited about.

He tells The Daily Ticker, “I would say we have a housing bubble…again.”

Stockman argues a combination of artificially low interest rates and speculation are to blame, not unlike the last boom and bust cycle in real estate.

“We don’t have a real organic sustainable recovery because in a world of medicated money by the central bank, things aren’t what they appear to be,” Stockman argues.

And according to Stockman, it’s this medicated, cheap money being put to work by investors that’s driving the apparent healing in some of the hardest hit real estate markets in the country.

“It’s happening in the most speculative sub-prime markets, where massive amounts of ‘fast money’ is rolling in to buy, to rent, on a speculative basis for a quick trade,” he contends. “And as soon as they conclude prices have moved enough, they’ll be gone as fast as they came.”

By ‘fast money’, Stockman is referring to professional investors like hedge funds and private equity firms. To his point, global investment firm Blackstone (BX) has spent more that $2.5 billion on 16,000 homes to manage as rentals, according to Bloomberg. It’s now the country’s largest investor in single-family homes to manage as rentals, with properties in nine markets. And Blackstone is joined by others like Colony Capital LLC and Two Harbors Investment Corp. (SBY) in trying to turn this market into a new institutional asset class, Bloomberg reports.

 

Stockman argues the problem in housing is the two forces needed for a recovery, first-time buyers and trade-up buyers, are missing. With the combination of 7.9% unemployment and staggering student loan debt, he doesn’t see a young generation of new home buyers coming into the market. And with baby boomers heading for retirement with less than adequate savings, he thinks they’ll be trading down with their homes, not up.

 

Stockman sees a rise in interest rates as the trigger for any kind of bust. He says you can’t have zero rates forever, referring to the Fed’s ZIRP and quantitative easing policies of the last several years.

“As soon as the Fed has to normalize interest rates, housing prices will stop appreciating and they’ll probably head down,” he explains. “The fast money will sell as quickly as they can and the bubble will pop almost as rapidly as it’s appeared. I don’t know how many times we’re going to do this, and the only people who benefit are the top one percent – the hedge funds, the LBO funds, the fast money people who come in for a trade, make a quick buck, and move along to the next bubble.”

Mortgage rates, for their part, rose from an average 3.42 percent to 3.53 percent on Thursday, the sharpest increase in 10 months, according to the weekly survey of 30-year mortgages by Freddie Mac, the government-backed mortgage company. Even still, mortgage rates are hovering around their lowest levels in more than 30 years.

As for the “American Dream” of home ownership, Stockman argues the past model where the government was trying to get to 69% home ownership was a huge policy mistake that led to no-downpayment loans, liars loans, and a degradation of lending standards. He says the government should have no dog in the hunt when it comes to ownership versus renting.

“Let the market decide,” Stockman says.

via finance.yahoo.com