Real Estate News

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Real Estate Agent with EA Realty Team 9039384

With home prices low, now could be a good time for parents to give their children a home or even an investment property. Here are some suggestions for managing the tax consequences from Mark Luscombe, tax analyst with Wolters Kluwer: Give a cash gift-Individuals are allowed to gift up to $13,000 per person in a given year without incurring gift tax. That means a couple could give their offspring and spouse $52,000 in a single year to go toward a down payment. Lend money-The government requires that family members meet or exceed minimum loan rates to avoid having the loan be considered a gift. The rates are currently low. One way to handle this is for parents to use the $52,000 gift exclusion to forgive both interest and principal. Use a trust-Set up a qualified personal residence trust, or QPRT. You'll need an attorney to handle this transaction, but in a nutshell, parents put the home they want to give their children into a trust. At the end of a pre-set term, the home passes to the children with no taxes due.                   Source: The Wall Street Journal


Housing experts predict that multi-family rental properties and apartments will recover fastest from the current downturn, followed by housing in cities that didn't overbuild. The market is likely to hit bottom in the next few months, says Bernard Markstein, senior economist and director of forecasting for the National Association of Home Builders. "Next year will see slow but steady improvement, as home builders are controlling their inventory," Markstein says. Apartments and other multi-family residences will snap back quickly once businesses start hiring again, predicts Victor Calanog, director of research at Reis. Baby boomers looking for retirement homes and first-time home buyers also will lead the way out of the decline, predicts Bill Singer, a securities attorney and trader who is a member of Forbes.com's panel of financial gurus.            Source: Forbes.com


Low prices and high affordability both urge consumers back to the housing market, according to Realtor.com's national homeownership survey Nearly two-thirds (62.5%) of potential homebuyers surveyed named increased affordability as a motivator for them to purchase a home. Foreclosure bargains in their communities are the motivating factor for 19.6% of potential buyers surveyed. "Value is clearly motivating potential home buyers, and today's new level of affordability is still an under-appreciated reality that needs to be explored," said Realtor.com president Errol Samuelson in a release. "The variety and quality of homes currently within reach of the average American family is much greater than most people realize. Making credit available to responsible borrowers and building consumer confidence in the economy are now key factors in restoring vitality to the nation's housing market." The survey also showed that low prices aren't making sellers wary of the market. Only 10% of potential sellers said they were holding off putting their home on the market because of lower prices. In addition, 15.5% of potential buyers said they were motivated to buy soon because they believe prices are as low as they'll go. A concern over rates increasing was the factor an additional 15.5% of Realtors.com's respondents said is motivating them to buy, while the federal government's $8,000 tax credit for homebuyers is the motivation 14.6% of respondents said they need to get into the housing market.           Source: Housing Wire

Comments (1)

Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Great articles to repost here.  The overall consenses says a) we are almost at the bottom, b) first time home owners and c) baby boomers will lead the market out.  There are two target markets begging for some attention!

Jul 29, 2009 12:14 AM