Here’s a summary included in REALTOR Magazine Online (8/7/08) – “The housing-stimulus package that became law last week took a bite out of the home-sale exclusions for second-home owners. Under both the previous and the current law, most homeowners can sell their primary residence and exclude as much as $250,000 of the gain if they’re single or $500,000 if they are married and file jointly. To qualify for the full exclusion, owners typically must have owned the home and used it as their primary residence for at least two of the five years prior to the sale. In the new law, which takes effect Jan. 1 and affects property acquired after 2008, owners can’t exclude the gain from the sale of the home allocated to periods of ‘nonqualified use.’ That refers to any period (after the end of 2008) when the property isn’t used by the owner, spouse or former spouse as a principal residence. For example, a married couple buys a home Jan. 1, 2009, for $600,000 to hold as an investment. On Jan. 1, 2012, three years later, they begin using it as their principal residence. They live there for two years and sell the property on Jan. 1, 2014, for $1.1 million for a profit of $500,000. Under the old law, they would have been able to exclude the entire $500,000 gain from their taxable income. But under the new law, they could exclude only two-fifths of the gain, or $200,000, since the other three-fifths would be considered attributable to the three years the home wasn’t their principal residence. Source: The Wall Street Journal, Tom Herman (08/06/2008)”
Foreclosures in Maine are on the rise, but the trend does not threaten the state’s financial institutions, according to a study released last week by the Maine Bureau of Financial Institutions.
Maine’s 34 state-chartered banks and credit unions completed 67 foreclosures in 2007, a 29% increase from the 52 foreclosures completed in 2006, according to a press release from the bureau. During the first quarter of 2008, there were 28 completed foreclosures, up from 25 for the prior three months.
The state’s financial institutions held 88,000 mortgage loans between October 2006 and March 2008, according to the study. During that time one loan in 528 was in the process of foreclosure.
More information on the status of residential real estate lending by Maine’s financial institutions is available in the bureau’s 2008 Annual Report to the Legislature.
Now is the time to buy!
According to an April 14 article on Realtytimes.com, “The first quarter of 2008 makes the 24th consecutive quarter that rental prices have escalated nationwide.” Click here to read the rest of the article, “Realty Viewpoint: If You Think You’re Saving Money Renting…Think Again.”
While Your First Home, the first book in the Keller Williams Realty Guide Series, emphasized that, “If you can afford to rent, you can afford to buy,” holds true. This point appears truer now than ever before.
Right now is the best time for new buyers to get out of rental properties and enter the housing market. Interest rates over the last 15 months have gone from 6.2% in January 2007 to 6.7% in July 2007, then down to 5.75 in January 2008. In recent weeks it has gone to about 5.95%. Are Renters taking advantage of our current market conditions and converting to Home Owners? We’ll certainly find out.
This Maine Real Estate Spring market is already showing signs of an up-swing. Massachusetts is already experiencing this as well as other New England States. Keep your eye on our Spring real estate market.
To search for Maine Real Estate, over 25,000 properties, visit one of our Maine MLS sites at:
Real Estate at the Crossroads: Choosing to Thrive
Recapping the shift in the real estate market at Family Reunion, Gary Keller urged attendees to seize the current market to their advantage. Keller explained that the 10-year run-up in real estate that began in the early 1990s, led to an environment in which homes were no longer affordable, lenders were willing to take unreasonable risks and inventory rose to record levels.
This chain of events led to mortgage lenders pulling back, followed by a credit squeeze, increased inventory, dropping prices, rising defaults, slipping consumer confidence and reluctant buyers.
ECONOMIC STIMULUS: NAR applauds the Economic Stimulus package passed by the U.S. Senate last night which includes important provisions that will temporarily raise the FHA loan limits.NAR developed estimates of the temporary FHA and GSE single-family loan limits based on HUD’s existing FHA loan limits. Per the economic stimulus measure, HUD is required to publish the official new temporary loan limits within 30 days of enactment. NAR’s figures are estimates, not official figures. GSE limits remain $417,000 in Maine. Maine’s estimated FHA increases here – Androscoggin – from $200,160 to $271,050; Aroostook – from $200,160 to $271,050; Cumberland – from $256,025 to $336,875; Franklin – from $200,160 to $271,050; Hancock – from $207,100 to $272,500; Kennebec – from $200,160 to $271,050; Knox – from $200,160 to $271,050; Lincoln – from $241,395 to $317,675; Oxford – from $200,160 to $271,050; Penobscot – from $200,160 to $271,050; Piscataquis – from $200,160 to $271,050; Sagadahoc – from $256,025 to $336,875; Somerset – from $200,160 to $271,050; Waldo – from $200,160 to $271,050; Washington – from $200,160 to $271,050; York – from $256,025 to $336,875.