Housing Outlook Key to Rent or Sell Decision

Evaluating Your Rent Vs. Sell Decision

 

The real estate climate forecast for the coming year is partly sunny -- and warming up!  Yet, with no double-digit appreciation in sight, some who plan on selling a home in Salt Lake City and beyond face the very practical question: is the winter of 2013 the right time to sell?

For those who stand to make a gain from selling, the decision boils down to convenience. Whether sale prices rise or fall, the cost of their next home will probably move in the same direction. 

But what about those who suspect that the overhang from the financial crisis will probably result in some degree of net loss? How do they decide whether it makes more sense to sell and take the loss, or to rent -- and wait? Emotions aside, the financial impacts can be examined. If you are considering selling a home in the Salt Lake City or any area in the US and don’t stand to make a profit, asking yourself some questions can help reach a decision: 

·       Can I afford to take a loss?  If you might need cash from your current property to purchase another, waiting is likely to be the safest course. 

·       If I have to take a loss, will there be a tax advantage to doing so in 2013?  If you expect to sell a business or come into any other form of extra income during this tax year, check with your CPA to see if this year’s the right time.

 

·       If I choose to rent my home, am I prepared to be a landlord?  Are you up-to-date on applicable federal and local fair housing ordinances and tenants’ rights issues?  If not, it’s practical to factor in the cost of a property management agency (usually 7 – 15%).

·       Am I prepared to wait it out?  If you decide to rent a local home and wait for the market to catch up to your profit goals, are you prepared to wait X years before selling? On-again off-again selling decisions can result in high tenant turnover -- which eats into your bottom line.  

Selling a home vs. renting it out is a decision only you can make -- why starting with accurate information is so important. I will be happy to meet for a confidential consultation on the value of your Salt Lake City home in today’s market. It is a very good place to start.

The War on Gun Control...

Are the President's Kids More Important Than Yours?   What are your thoughts on this?

Events Salt Lake City and Beyond...

Weekly Event Update

January 8, 2013

EVENT SPOTLIGHT:

The Phantom of the Opera January 16-February 2, 2013 De Jong Concert Hall - Provo Originally directed on Broadway by Harold Prince Original Broadway production by Cameron Mackintosh and the Really Useful Group Based on the novel Le Fantwme de l'Opera by Gaston Leroux Orchestrations by David Cullen and Andrew Lloyd Webber. < More Info

FEATURED EVENTS:

DRUMLINE LIVE January 15-16, 2013 The Ellen Eccles Theatre - Logan DRUMLine Live a show-stopping attraction inspired by 20th Century Fox's hit movie  Drumline , brings show-style marching bands to the theatrical stage. With riveting rhythms, bold beats and ear-grabbing energy, the staged show will be a synchronized musical showcase of the HBCU experience. Incorporating original compositions and soul-infused interpretations of top 40 hits, group performances will range from colorful, choreographed routines to heavy doses of drum riffs and cadences. < More Info

Randy Rogers Band January 11, 2013 The State Room - Salt Lake City When a band spends the bulk of its year on the road, its members are bound to have their share of trouble and strife. But only the truly talented are able to take those trying experiences and turn them into enduring art. The Randy Rogers Band is one of those few, and they've transformed coal into diamonds yet again on their latest album for MCA Nashville, Trouble. < More Info

Cesar Millan January 25, 2013 Abravanel Hall - Salt Lake City Cesar will share his secrets on how to transform dogs and their owners in this unique and new live event that has wowed audiences across the US, UK, Canada, and Europe. < More Info

Mortgage Industry - Temporary Breath of relief

Mortgage industry fares well in fiscal cliff deal, debt forgiveness law survives

The mortgage industry can breath a sigh of relief with the final fiscal cliff deal bringing back a popular tax break on mortgage insurance premiums and debt forgiveness for borrowers who go through a short-sale or some other type of debt reduction.

A topic that is still up for discussion and likely to surface later in the year is whether the popular mortgage interest tax deduction will be part of a long-term deficit reduction plan.

Still, the deal passed by the Senate and House on Jan. 1 is one that leaves room for hope in the housing market.

The American Taxpayer Relief Act of 2012 apparently extends a law that expired at the end of 2011, which allowed for the deductibility of mortgage insurance premiums, according to a research report from Isaac Boltansky with Compass Point Research & Trading. The law now applies to fiscal years 2012 and 2013.

"The law dictates that eligible borrowers who itemize their federal tax returns and have an adjusted gross income (AGI) of less than $100,000 per year can deduct 100% of their annual mortgage insurance premiums," Compass Point said.
"Certain borrowers with AGIs above $100,000 may benefit from the deductibility as well but are subject to a sliding scale. The tax break covers private mortgage insurance as well as mortgage insurance provided by the FHA, the VA, and the Rural Housing Service. In 2009, about 3.6 million taxpayers claimed the mortgage insurance deduction," the research firm added.

One of the more watched provisions of the fiscal cliff was the Mortgage Forgiveness Debt Relief Act of 2007, which was set to expire on Dec. 31.

The fiscal cliff deal extends it for another year, meaning homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale are exempt from being taxed on the forgiven amount.

"The amount extends up to $2 million of debt forgiven on the homeowner's principal residence," Compass Point Research & Trading said. "For homeowner's to qualify, their debt must have been used to 'buy, build, or substantially improve' their principal residence and be secured by that residence. The law, which was passed in 2007 with a 5-year sunset provision, will now be in effect until Jan. 1, 2014."

Another minor win for housing is a provision tied to the government's plan to increase the capital gains tax rate from 15% to 20% for individuals who earn more than $400,000. While in theory, this is harder on higher-income homeowners, Compass Point sees a silver lining through an exclusion.
Compass Point notes the law "states that only gains of more than $250,000 for individuals ($500k for households) are subject to taxes on the excess portion of capital gains. Point being, in order for an individual homeowner to be impacted by the increased capital gains tax rate they would need to have an adjusted gross income above $400,000 and gain more than $250,000 from the sale of the property. Since this exclusion threshold remained intact, the impact of the capital gains tax increase is limited."

Article by By Kerri Ann Panchuk - Housingwire

Salt Lake City and Beyond Happenings...

Weekly Event Update

January 1, 2013

EVENT SPOTLIGHT:

The Philadelphia Story January 11-26, 2013 Simmons Pioneer Memorial Theatre - University of Utah Tracy Lord is young, beautiful, sophisticated, fabulously wealthy, and about to marry what she thinks is the man of her dreams. But when her dashing ex-husband and the two reporters assigned to cover her wedding descend on her family's opulent country house outside Philadelphia the day before the ceremony, Tracy has a hard time keeping her nuptials, not to mention the dictates of her own heart on track. < More Info

FEATURED EVENTS:

Hollywood Undead January 11, 2013 In The Venue - Salt Lake City Hollywood Undead is hitting the road in support of their upcoming release, Notes From The Underground . Experience their metallic hip-hop live. < More Info

Sara Watkins and Ruth Moody January 5, 2013 George S. and Dolores Dore Eccles Center for the Performing Arts - Park City Sara Watkins, whose fiddle playing wizardry and lovely voice helped propel the trip of child prodigies, Nickel Creek, into the "newgrass" stratosphere is a formidable force as a solo artist. She's the girl next door with a fiery bow and crystal vocals who's performed with Garrison Keillor and the indie rock group The Decemberists and guested on John Mayer's recent album. Juno-Award winning singer-songwriter-musician Ruth Moody is best known for her work with The Wailin' Jennys, and she, too, can aptly command a solo performance. < More Info

Key Lewis January 4-5, 2013 Wise Guys Comedy Club - Ogden This Californian born native is a high-energy, improvisational, storytelling, multiple-personality nutcase! Key's love for the people and hunger for the stage is his undying motivation. His comedic stories about his interracial childhood, family, and his unusual views on relationships, make Key a gut-busting joy to watch. < More Info

Mortgage Debt Relief Act...

 Mortgage Debt Relief Act Extension Through 2013

 

Happy New Year!

FINALLY, the extension for the Mortgage Debt Relief Act passed the Senate…now Congress has to sign off. Expect this to happen asap…we will update you the moment we have more insider news to share with you..

If you would like to read the entire article here it is.

Here is the excerpt:
It also extends unemployment benefits, the sales tax deduction, the mortgage debt relief deduction and energy tax credits through 2013, and pegs the maximum amount of inheritances that can be waived under the estate tax to inflation.

Expect 2013 to be the best year for real estate in at least 7 years.