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House Prices: Where Are They Headed This Winter?

In a blog post last month, we projected that home values might actually begin to soften on a month-over-month basis throughout the winter. There are other expert analysts that are also notifying their readership of this possibility. Calculated Risk, in apost last week explained:

 

“The monthly Case-Shiller house price indexes will show month-to-month declines soon, probably starting with the October report to be released in late December. The CoreLogic Index has already started to decline on a month-to-month basis.” 

 

Fiserv, another company that analyzes home prices, came to the same conclusion:

“We project a small, short-term price decline for many markets that recently experienced double-digit appreciation.”

 

This may seem counter to the headlines you have seen claiming home prices are on the rise. However, we must realize that there is seasonality to home price movements. Over the last few years, prices have increased in the spring through the early fall. They then soften throughout the winter. As Calculated Risk reveals:

“This is not a sign of impending doom or another collapse in house prices – it is just the normal seasonal pattern.”

 

If you are thinking of selling your home in the next 6-8 months, you should realize that waiting may not ensure a higher price and perhaps may even result in a slightly lower sales price.

 

Will the Mortgage Forgiveness Act Be Extended?

The Mortgage Forgiveness Debt Relief Act of 2007 is set to expire at the end of the year. The act allows taxpayers to be excluded from paying taxes on forgiven debt in certain situations. As their website explains:

 

“The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.”

 

The act also applies to debt forgiven in a short sale. The big question is whether or not Congress will extend it past the December 31st deadline. Forty-one state attorneys general signed a letter urging Congressional leaders to extend the act. In the letter, it is explained:

 

“Each of our offices receives calls every day from homeowners trying to save their homes or struggling to recover from losing their homes…Congress must act. We urge you to extend the existing exclusion of forgiven or cancelled mortgage debt from taxable income under federal law before it expires at the end of this calendar year.”

 

The push is on to get an extension. Here are the current bills in Congress:

 

 

Whether Congress will act in time to extend the act before its expiration is anyone’s guess.

5 Reasons to Buy a Home Now Instead of the Spring

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:   Supply Is Shrinking With inventory declining in many regions, finding a home of your dreams may become more [...]

Shadow Inventory Shrinking…in Most Regions

The Mortgage Bankers Association (MBA) released their 3rd Quarter Delinquency Survey last week. The report revealed that both the delinquency and shadow inventory numbers are improving. DSNews, reporting on the survey, explained:   “The Mortgage Bankers Associationnoted in a Thursday report that a four-year low in serious mortgage delinquencies and a drop in the percentage of loans in foreclosure for the [...]

Why Waiting Until Spring to Sell May NOT Make Sense

We have been happy to report that house prices have increased over the last several months. However, we have also warned that month-over-month prices since 2009 have softened in the fall and winter. We are beginning to see that situation repeat itself in 2012.   CoreLogic, in their latest House Price Index revealed that prices increased by 5% over [...]

Is It Time to Buy A Rental Property?

Yesterday, we discussed rising rents and their impact on the long term housing expense of tenants. Today, we want to look at the opportunities that single-family rental units present for the small investor.   With house prices inching up and rents skyrocketing, this may be the perfect time to invest in single family residential real estate.   [...]