Just contact us to find out how much your home value has increased. You should be pleasantly surprised.  

Jerry@DynamicHomeSelling.com or call/text to 706-577-0507

Many people have questions about home prices right now. How much have prices risen over the past 12 months? What’s happening with home values right now? What’s projected for next year? Here’s a look at the answers to all three of these questions.

How much have home values appreciated over the last 12 months?

According to the latest Home Price Index from CoreLogic, home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at an accelerated pace for each of the last eight months (see graph below):

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Homeowners who itemize their deductions can claim a deduction for real property taxes paid on their homes. Combined with the deduction for mortgage interest, which is also available only for those who can itemize, the property tax deduction can significantly reduce the cost of buying and owning a home.

According to the IRS, the average real property tax deduction claimed for the tax year 2018 was just over $6,800.

What is the property tax deduction?

Government entities in all 50 states (and the District of Columbia) levy a tax on real property. This kind of tax is mostly imposed by local taxing jurisdictions, such as counties, municipalities, townships, or schools, or other special districts. The tax almost always equals a percentage of the taxable value of the property.

Since the inception of the modern Internal Revenue Code in 1913, our federal tax law has allowed a deduction for property taxes paid.

However, the Tax Cuts and Jobs Act of 2017 limits the deduction of all state and local taxes (SALT) to $10,000 per year for tax years 2018 through 2025. This includes property taxes as well as state or local income taxes or sales taxes.  

How has the increased standard deduction affected the deductibility of property taxes?

The modern income tax has always allowed certain deductions including state and local taxes and certain interest paid. However, to reduce the burden of recordkeeping on taxpayers, Congress in 1944 created the standard deduction.

The standard deduction grants every taxpayer a certain assumed amount of deductions that are available to reduce their taxable income, even if the taxpayer did not incur the deduction. The impact of the standard deduction is that only if a tax filer’s actual amount of deductions is higher than the standard deduction would he or she itemize. If the actual amount of deductions is lower than the standard amount, taxpayers are better off claiming the higher standard amount.  

The Tax Cuts and Jobs Act nearly doubled the amount of the standard deduction, which greatly decreased the number of tax filers whose actual deductions exceeded the standard amount. The portion of tax filers who itemized dropped from about one in three in 2017 to about one in ten in 2018, which is the first year in which the higher standard deduction was in effect.

Concerning the property tax deduction, the proportion of filers who claimed the deduction sank from 26 percent in 2017 to just 10 percent in 2018.

The result of the huge increase in the standard deduction is that most tax filers effectively enjoy the benefit of the property tax deduction even if they paid little or no actual property tax. This has resulted in the tax incentive effect of the itemized deduction being lost for all but the 10 percent or so who itemize their deductions. For the remainder, the incentive has disappeared because they receive the same tax deduction whether they rent a home or own one.

How has the SALT deduction limit affected the property tax deduction?  

The $10,000 cap on the deduction for state and local taxes paid has had a double impact on those who are subject to it. First, the limit makes it more difficult for a tax filer’s total itemized deductions to exceed the standard deduction. If the total deductions remain below the higher standard amount, there is no specific tax incentive for paying the property tax as those who claim the standard get more tax benefit, even if they paid no actual property tax.  

Second, the $10,000 limit can reduce the actual amount of the tax deduction, even for those who can itemize. The higher the actual tax paid, the more the limit pinches.

How to claim a property tax deduction

To claim the property tax deduction, tax filers must go through the following steps:  

1. Determine if you can itemize your deductions

As indicated above, only if you have total itemized deductions (including state and local taxes, charitable contributions, and deductible interest expense) exceeding the standard deduction amount does it benefit you to itemize. If your actual amounts are less than the standard deduction, you will be better off claiming the standard deduction.  

For the tax year 2021, here are the standard deduction amounts:

Filing status              Standard deduction

Single                             $12,550

Married, filing jointly         $25,100

Married, filing separately   $12,550

Head of household           $18,800

2. Use Schedule A to itemize deductions

Once you determine that you do have total deductions exceeding the standard amount, use Schedule A to report the deductions.

3. Calculate your tax bill based on your deductions

Itemized deductions (or the standard deduction, whichever is higher) are subtracted from your adjusted gross income (AGI) to determine your taxable income. Thus, the dollar amount of your deductions will reduce the amount of tax you owe. At the margin, every dollar of deduction will lower your taxes by the tax bracket for your taxable income level. So, for example, if you are in the 24 percent tax bracket, you will save $24 in tax for every $100 you have in deductions.  

4. File your tax return

Once your tax return is completed and signed, you can submit it.

What other tax deductions are available for new homeowners?

Homeowners also may be eligible to deduct mortgage interest paid on their loan. However, some limits govern this deduction.

And, in certain cases, mortgage insurance premiums can also be deductible. As with the property tax deduction, these are itemized deductions and will be beneficial only if the total amount of such deductions is greater than the standard deduction.
 
​Homeowners who itemize their deductions can claim a deduction for real property taxes paid on their homes. Combined with the deduction for mortgage interest, which is also available only for those who can itemize, the property tax deduction can significantly reduce the cost of buying and owning a home.

According to the IRS, the average real property tax deduction claimed for the tax year 2018 was just over $6,800.

Many people are now working from home so it might be good to ask your tax professional about the "Home Office" deduction.

*This article was written by the National Association of Realtors and is not intended to be Tax Advice. Always consult a Tax Professional!

​Even though experts agree there’s no chance of a large-scale foreclosure crisis, there are a number of homeowners who may be coming face-to-face with foreclosure as a possibility. And while the overall percentage of homeowners at risk is decreasing with time (see graph below), that’s little comfort to those individuals who are facing challenges today.

The good news is, there are alternatives available to help you avoid having to go through the foreclosure process, including:

• Reinstatement
• Loan modification
• Deed-in-lieu of foreclosure
• Short sale
• Quick Offer (we can give non-legal advise while discussing many options)

But before you go down any of those paths, it’s worth seeing if you have enough equity in your home to sell it and protect your investment. We can Help with your Home Value. Contact Us

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.
In today’s real estate market, many homeowners have far more equity in their homes than they realize. Over the last year, buyer demand has been high, but housing supply has been low. That’s led to a substantial increase in home values. When prices rise, so does the amount of equity you have in your house.
According to CoreLogic, on average, homeowners gained $33,400 in equity over the last 12 months, and the average equity on mortgaged homes is now $216,000 (see map below):

So, what does that mean for you? Over the past year, chances are your home’s value and therefore your equity has risen dramatically. If you’ve been in your home for a while, the mortgage payments you’ve made over time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.
Frank Martell, President and CEO of CoreLogic, elaborates on how equity can help:

To find out what your house is worth in today’s market, work with a local real estate professional. We’ll be able to give you an estimate of what your house could sell for based on recent sales of similar homes in your area. Since home prices are still appreciating, you may be able to sell your house to avoid foreclosure.
If you find out that you have to pursue other options, your agent can help with that too. We’ll be able to connect you with other professionals in the industry, like housing counselors who can look into your unique situation and offer advice on next steps if selling isn’t the best alternative.

​In April, the National Association of Home Builders (NAHB) posted an article, Home Buyers’ Preferences Shift Towards New Construction, which reported:
“60% of people who were looking to buy a home in 2020 said they’d prefer new construction to an existing home.”

However, it seems buyers are now shifting their preferences back to existing homes.
The latest Consumer Confidence Survey reveals the percentage of Americans planning to buy a home in the next six months is virtually the same as it was back in March. However, the percentage that plan to buy a newly constructed home is lower for that same period.
​
NAHB confirms this sentiment in their latest Housing Trends Report. The organization explains that existing homes are now the top preference among today’s buyers. Here’s a breakdown of those findings:

Why the shift?

There are several reasons why buyer preference is shifting. Here are two that impact purchasers looking to move in now:

• The process may move faster. Builders may not be able to guarantee when the house will be complete and ready for move-in due to supply chain challenges with materials like lumber and appliances. If you buy an existing home, not only is it ready, it also likely has a refrigerator, range, and other necessary home appliances already.
• There are no unexpected costs during the buying process. With the price of land, labor, and lumber being so volatile, many builders are including an escalation clause in the price negotiation to cover rising expenses. With an existing home, the final price you will pay is negotiated upfront.

​Bottom LineIf you’re a homeowner looking to sell, your house is more attractive to a greater number of buyers as compared to earlier in the year. This might be the time for us to connect to discuss the possibility.

Are you clamoring for extra rooms or a more functional floorplan in your house? Maybe it’s time to make a move. If you’ll be able to work remotely for the long-term or your overall needs have simply changed, it’s a great time to sell your house and move up. Why? With mortgage rates in their favor and higher-priced home sales powering more moves across the country, sellers in today’s market are finding the space they need (and have always dreamed of) by purchasing a home in the upper end of the housing market.

With so few homes available for sale and high demand from today’s homebuyers, sellers are profiting in major ways this season. Bidding wars are gaining traction, driving up the sale price of more and more homes throughout the country. This means sellers are able to leverage extra cash from higher-priced sales while also taking advantage of today’s low mortgage rates when they purchase their next home. It’s the perfect scenario to move up into a true dream home. According to the April Luxury Market Report from the Institute for Luxury Home Marketing:

“The Institute’s recent analysis of sales in 2020 for homes over 5,000 square feet support the continuing preference for larger homes. The analysis determined that there was a 17% increase in the number of 5,000+ sq ft homes sold when compared to the number of sales in 2019.

Luxury home prices continue to see record highs in the majority of affluent ex-urban communities, as the influence of being able to work from home is still driving buyers away from living in high density areas. Low interest rates also remain in play, allowing buyers to realize the affordability of owning a larger property, which further reinforces this trend.”

Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), also explains:

“The market is hot pretty much everywhere and across all price points . . . The only area where there is sufficient inventory is in $1 million-plus homes . . . .”

While this price range certainly doesn’t fit every budget, if it’s in your reach this summer, you may want to make your move sooner rather than later. Today, more homes are available in this segment of the market, but as the report mentions, more buyers are investing here too, so competition may heat up sooner rather than later.
​
Bottom Line
If you’re planning to sell your current home to move into a larger one, let’s connect today. We’ll discuss your current situation and the opportunities in our local market.

Should you be thinking along these lines, please contact Jerry!
706.577.0507 Call/Text
Jerry@DynamicHomeSelling.com

There’s a lot of discussion about affordability as home prices continue to appreciate rapidly. Even though the most recent index on affordability from the National Association of Realtors (NAR) shows homes are more affordable today than the historical average, some still have concerns about whether or not it’s truly affordable to buy a home right now.

When addressing this topic, there are various measures of affordability to consider. However, very few of the indexes compare the affordability of owning a home to renting one. In a paper just published by the Urban Institute, Homeownership Is Affordable Housing, author Mike Loftin examines whether it’s more affordable to buy or rent. Here are some of the highlights included.

1. Renters pay a higher percentage of their income toward their rental payment than homeowners pay toward their mortgage.

The report explains:

“When we look at the median housing expense ratio of all households, the typical homeowner household spends 16 percent of its income on housing while the typical renter household spends 26 percent. This is true, you might say, because people who own their own home must make more money than people who rent. But if we control for income, it is still more affordable to own a home than to rent housing, on average.”

Here’s the data from the report shown in a graph:

Water heaters face a love-hate relationship among homeowners. We love when they do exactly what they’re supposed to: give us hot water for our showers, our faucets and our dishwashers. But most people hate the realization that the hot water isn’t getting hot when it’s supposed to, especially in the shower. A good way to avoid this realization is to drain your water heater at least once a year. Here’s why.

The water that runs through your water heater contains minerals. Over time, these minerals leave sediment buildup. This buildup can damage your tank or heating elements. It can also clog the drain and water lines, which can make your water heater run less efficiently, shorten its life span and force expensive repairs.

With a little bit of time and a guide, you can drain your water heater yourself. You should consider draining your water heater once a year to extend its life and keep it running smoothly. If it’s making banging, rumbling or popping noises, then you should drain it as soon as possible. Those are signs of sediment buildup.

Here’s how you can drain your water heater.

1. Turn off the gas or electricity
If you have a gas heater, turn off the gas. There should be a shutoff valve for the gas supply lines to your house.

If you have an electric heater, go to the fuse box and turn off the breaker that controls the water heater.

2. Turn off the thermostat
The water heater’s thermostat is usually located near the bottom of the heater. If you have a gas heater, turning off the thermostat may also turn off the pilot light. If so, don’t forget to relight the pilot when you’re finished draining the tank.

3. Turn off the cold water supply to the tank
You don’t want cold water to continue filling the tank while you’re trying to drain it! This can cause spikes in your water bill. This step is easy to overlook, so make sure you’ve shut off your cold water supply to the tank before going any farther.

4. Wait for the tank water to cool
The water in your water heater could be scalding. If you try to drain scalding water, you’re likely to burn yourself. By waiting for the water to cool (about 30 minutes to 2 hours), you can more safely drain it.

5. Check for leaks
Once you’ve turned off the above elements and let the water cool, it’s time to check for leaks. If you notice any dripping or standing water near your water heater, or any water near connected valves or pipes, you likely have a leak. A leak means higher water bills. It also means that your heater won’t run as efficiently as possible.

At this point, you may need to research, find and contact a professional to assess the leak. Or, if you have a systems and appliances home warranty from 2-10 Home Buyers Warranty (2-10 HBW), you can file your claim through us and we’ll dispatch a quality, approved professional to assess your leak.

6. Open a hot water tap in the house
​If your water heater doesn’t have any leaks, you can move to the next step: opening a hot water tap in your house. Doing this prevents a vacuum from forming and makes draining the tank easier. Keep the tap open until you’re finished draining the tank.

7. Open the temperature and pressure (T&P) release valve
The T&P valve will be either high on the side or on the top of the water heater. First, make sure it works. If it isn’t functioning properly, pressure can build inside, causing your water heater to burst. Here’s how to test it.

Lift the T&P lever part-way, allowing it to snap back into place. Don’t lift it all the way. You should hear a gurgling noise as the valve sends some water to the drainpipe.

Be careful as you do this. If you didn’t wait for the tank to cool, the hot water released may be scalding.
If no water comes out or you don’t hear any gurgling, replace it immediately, as this is a sign that pressure could be building to a critical point.

8. Attach a hose to the heater’s drain
If the T&P release valve is working correctly, connect a garden hose to your water heater’s drain line, which looks like a spigot near the bottom of the tank. Run the hose to your basement drain or run it outside the house.

Use a strong hose. Cheap garden hoses can become soft when hot water runs through them, causing leaks.

9. Turn on all of the hot water faucets in your house
This prevents vacuums from forming. Don’t be alarmed if the water only trickles out. That’s normal.

10. Open the heater’s drain valve, allowing the tank to empty
Water and sediment will begin to drain through the hose you attached to the water heater’s drain.

11. Turn on the cold water supply to the heater
Let water continue to flow through the hose until you see only clear water coming out. This may take some time. Once clear water flows from the hose, you can close the spigot. Then, all you need to do is:

12. Relight the pilot light or restore power to the heater13.
Turn your heater’s thermostat back up14. Close the hot water taps throughout the house15. Turn the electricity or gas back on

​That’s it! You’ve successfully drained your water heater, lengthening its life.
​
When Buying or Selling A Home with Us - We work hard to help you to feel confident about the transaction.
​
​Call, Text or email Jerry Today - 706-577-0507 

Email: Jerry@DynamicHomeSelling.com to receive Free but critical information about your home and neighborhood.

 Homebuyers Are in the Mood to Buy Today

According to the latest FreddieMac Quarterly Forecast, mortgage interest rates have fallen to historically low levels this spring and they’re projected to remain low. This means there’s a huge incentive for buyers who are ready to purchase. And homeowners looking for eager buyers can take advantage of this opportune time to sell as well.

There’s a very positive outlook on interest rates going forward, as the projections from the FreddieMac report indicate continued lows into 2021:

“Going forward, we forecast the 30-year fixed-rate mortgage to remain low, falling to a yearly average of 3.4% in 2020 and 3.2% in 2021.”
​
 With mortgage rates hovering at such compelling places, ongoing buyer interest is bound to keep driving the housing market forward. Rates also reached another record low last week, so homebuyers are in what FreddieMac is identifying as the buying mood:

“While the rebound in the economy is uneven, one segment that is exhibiting strength is the housing market. Purchase demand activity is up over twenty percent from a year ago, the highest since January 2009. Mortgage rates have hit another record low due to declining inflationary pressures, putting many homebuyers in the buying mood. However, it will be difficult to sustain the momentum in demand as unsold inventory was at near record lows coming into the pandemic and it has only dropped since then.”

There’s no doubt that even though buyers are ready to purchase, it’s hard for many of them to find a home to buy today. Mortgage rates aren’t the only thing hovering near all-time lows; homes available for sale are too. With housing inventory as scarce as it is today – a nearly 20% year-over-year decline in available homes to purchase – keeping buyers in the purchasing mood may be tough if they can’t find a home to buy (See graph below):

​Bottom Line

Spring is right around the corner, so flowers are starting to bloom, and many potential home-buyers are getting ready to step into the market. If you’re thinking of buying this season, here’s how mortgage interest rates are working in your favor.

Freddie Mac explains:

“If you're in the market to buy a home, today's average mortgage rates are something to celebrate compared to almost any year since 1971…

Mortgage rates change frequently. Over the last 45 years, they have ranged from a high of 18.63% (1981) to a low of 3.31% (2012). While it's not likely that the average 30-year fixed mortgage rate will return to its record low, the current average rate of 3.45% is pretty close — all to your advantage.”

To put this in perspective, the following chart from the same article shows how average mortgage rates by decade have impacted the approximate monthly payment of a $200,000 home over time: Clearly, when rates are low – like they are today – qualified buyers can benefit significantly over time.

Keep in mind, if interest rates go up, this can push many potential home-buyers out of the market. The National Association of Home Builders (NAHB) notes:

“Prospective home-buyers are also adversely affected when interest rates rise. NAHB’s priced-out estimates show that, depending on the starting rate, a quarter-point increase in the rate of 3.75% on a 30-year fixed rate mortgage can price over 1.3 million U.S. households out of the market for the median-priced new home.”

Bottom Line 
​You certainly don’t want to be priced out of the market this year, and waiting may mean a significant change in your potential mortgage payment should rates start to rise. If your financial situation allows, now may be a great time to lock in at a low mortgage rate to benefit greatly over the lifetime of your loan.

By the end of last year, many homeowners found themselves with more equity than they realized, and at the same time their wages were increasing. When those two factors unite, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.

Three Things to Think About in the 2020 Luxury Housing Market

1. Prices

The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,

“There’s a good link between luxury real estate prices and [economic] growth.”

Available inventory is a key element that can impact home prices. At the upper range, the inventory is greater in comparison to the entry-level market, making moving up to a luxury home a growing reality for many buyers right now.

2. Activity in the Market

With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,

“Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”

Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.

Buyers are also getting more for their money with greater purchasing power due to the current low interest rates.

3. Buyers Are Coming Back

Keep in mind, buyers are often sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.

The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,

“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”

Bottom Line

If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.

​When Buying or Selling A Home with Us - We work hard to help you to feel confident about the transaction.
​
​Call, Text or email Jerry Today - 706-577-0507 Email: Jerry@DynamicHomeSelling.com to help by giving Free but critical information about your home and neighborhood.

Below are four compelling reasons to list your house this winter.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. Buyers are ready, willing, and able to purchase, and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Inventory is still under the 6-month supply needed for a normal housing market. This means in the majority of the country, there are not enough homes for sale to satisfy the number of interested buyers.

Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move since they were unable to sell over the last few years due to negative equity situations. As home values continue to appreciate and homeowner equity grows, more and more homeowners will be given the freedom to move.

Many homeowners were reluctant to list their homes over the last couple of years, for fear they would not find a home to move into. That's all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase with new construction, too. Don’t wait until additional inventory comes to market this spring. 

3. Buyers Are Serious

At This Time of Year Traditionally, homeowners think about spring as a great time to list their homes, when more buyer traffic may be out there actively searching. In the winter, however, the buyers who are seeking a home – whether for relocation purposes or otherwise – are serious ones. They’re ready to make offers and they’re eager to move, often quickly. Your house may be exactly what they’re looking for, so listing now while other potential sellers are holding off may be your best opportunity to shine.

4. There May Never Be a Better Time to Move

Up If your next move will be into the premium or luxury market, now is a great time to move up. There is currently ample inventory for sale at higher price ranges. This means if you're planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that now. Demand for your entry-level or middle-tier home is high, and inventory in the luxury or premium market is too.

According to CoreLogic, prices are projected to appreciate by 5.6% over the next year. If you’re moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and in your mortgage) if you wait.

Bottom Line

​Selling your house and moving up sooner rather than later could lead to substantial savings and may end up being your best option in the current market. Get A Free Market Analysis