Leave mortgage interest deduction alone

According to RIS Media…

Americans overwhelmingly oppose any action by Congress to tamper with the mortgage interest deduction, according to a new nationwide survey of likely voters commissioned by the National Association of Home Builders (NAHB). Nearly 80% support retaining federal tax incentives to promote homeownership, which have been in the tax code since the introduction of federal income taxes in 1913.

You can see full results on the NAHB web site.

Submitted by Minneapolis REALTOR, Mary Rugani.

Home sales still down

Home sales have not changed since last month. And last month was a record low. It’s not a great sign for the industry or the economy. According to the Minneapolis Star Tribune…

Normally the building industry powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

But housing has been at the center of this downturn and it shows no signs of recovering quickly.

The only time new home sales were slower was in May, when the sales pace was 282,000. That's the worst pace on records dating back to 1963. July's results had been the worst on record, but were adjusted upward.

Submitted by Minneapolis Real Estate Agent Mary Rugani

Realtors for Rentals

As house sales slow down home owners are looking at alternatives – such as renting, In fact the NorthstarMLS (multiple listing service) now lists rentals alongside homes for sale.

According to the Minneapolis Star Tribune…

Not all subscribers to the MLS will be required to display rental listings.
Consumers will have the same access to that info as they do for sale listings, but they won't be able to post listings themselves.

Submitted by Real Estate Agent, Mary Rugani.

Federal money for foreclosures

The U.S. Department of Housing and Urban Development spent $7 billion to help local governments nationwide rescue neighborhoods whacked by the foreclosure crisis. Both St Paul and Minneapolis took advantage of the opportunity, managed by the Neighborhood Stabilization Program (NSP).

Altogether, the cities have been awarded $62.6 million in all three rounds.

According to the Minneapolis Star Tribune…

Recipients of the first-round money, awarded in late 2008, need to have it committed to projects by Monday or risk giving the money back. Minneapolis and St. Paul, which received $25 million combined in first-round awards, have met that goal, according to federal records and local officials.

The funding has been a win-win-win program for the Twin Cities. It has minimized homes left empty, optimized the improvements to home and increased employment in the areas.

Submitted by Minneapolis Realtor, Mary Rugani.

Importance of Keeping Basis Information on your Primary Residence

We want to thank our friends at BHB Advisors for sharing the following article on basis…

What is basis and why is it so important to me? Simply put, basis is typically what you initially purchased your home for plus any improvements. Currently the law allows an individual to exclude up to $250,000 of gain ($500,000 for married couples) from the sale of their primary residence. Basis in the primary residence is needed to determine the overall gain (or loss) on the sale of the primary residence. If there is a gain and they qualify for the exclusion any amount of gain above the exclusion is taxable income. With the decline in the real estate market many homes are selling for less than $500,000 and even fewer at a gain, therefore it is easy to think it is unimportant to keep track of the basis. But history has shown that values of homes kept for 15 or even 30 years can easily appreciate five to ten times in value. This is even more reason to keep track of basis since in 15 or 30 years from now the appreciation on a $200,000 house could easily be worth $1,000,000 or more. By keeping track of the basis you could reduce or even eliminate the income tax when you eventually sell your home.

Be sure to keep accurate records and receipts to prove the amount of the basis in your home starting with the settlement statement from your purchase (including closing costs and other expenses to purchase the property). Add to this any later expenses that add to your basis such as a room addition, finishing your basement, landscaping, new roof or windows, etc. To be considered additional basis the amounts paid need to add value or extend the life of the property. Expenses to maintain a house are not considered in the basis of the property. These would include painting, repairing a leaking pipe, or repairing a damaged floor. Keep the receipts together with your initial purchase.

The bottom line is that taking the time to save your receipts for any improvements could save you income taxes in the future.

Home sales down again in August

According to the Minneapolis Star Tribune…

Record low mortgage interest rates and deep seller discounts seem to have done little to boost home sales in the Twin Cities metro. During August closed sales were down 34.2 percent compared with last year, according to the monthly report released this morning by the Minneapolis Area Association of Realtors, pushing the median sale price of deals that closed that month to fall 1.6 percent - the first decline in the median sale price in seven months.

You can find the whole report on the Minnesota Association of Area Realtors web site.

Submitted by Minneapolis Realtor, Mary Rugani

Minneapolis Area Association of Realtors’ August Skinny on the Housing Market

What’s the quick lesson of the last month The economy is driving the housing market – learn more…