Michelle Millikin

Posts Tagged ‘home’

Even in a flat market, those pennies add up.
An article in today’s Boston Globe (Despite Low Prices, Many Shun Homeownership), casts a shadow on the dream of buying your own home. To be fair, it brings up a number of valid issues. Prices have indeed fallen and the market is still soft, thanks to eroding consumer confidence. Credit remains tight, which means fewer people will qualify for home loans , and they will need a bigger down payment to do so. Still, it misses the biggest point of them all: despite the increasing cost of getting into a mortgage, owning your own home will almost always be a smart long-term move.
Renting is not investing

The days of flipping property for a quick buck are gone, and you won’t see double-digit appreciation in most markets for several years, but that doesn’t mean your home has no value. One way or another, you’re going to spend money on housing. In most markets, you’ll spend a bit less to rent a home than buy it, but rent is not an investment. Even in the best of markets, you’ll never see a return, and your rent will rise as time goes on.
Owning a home may not get you rich, but renting will never even pay for your coffee. If you own a house for any length of time, you’re likely to get something back. Let’s say you live in a home for ten years, sell at a slight loss, and get back only your down payment and half of your mortgage payments . You’re still outperforming a renter. If your property appreciates, you’re doing even better, and at some point down the road, comparable rents will be far higher than your mortgage payment–while building zero equity.
Buyer’s markets mean choice

Tighter credit and a slew of foreclosures means more choice at bargain prices than we’ve seen in decades. Part of what fueled the house-flipping craze of the last decade was a lack of inventory. Low inventories fueled prices, which encouraged prospectors to snap up more houses, leaving the American consumers to take what they could get. With the prospectors and the predatory lenders gone, you can find the home you really want for the long term–not just for now–so you can watch your investment grow.
Buying has benefits

There are a host of other benefits to homeownership. Owning a home builds your credit, strengthens neighborhoods, and gives your family an unmatched sense of roots and participation in the community. And no recession can take that away.

There has been some recent concern that the recent health care reform bill would impose a 3.8 percent “sales” tax on the sale of every home. Here is what the bill would actually do regarding taxation of the sales of homes, according to the Tax Foundation:

“First, there is no “sales” tax on home sales in the health care bill. The bill would impose essentially a capital gains taxes on some home sales made by a limited number of taxpayers. (The health care law contains a new 3.8 percent tax on “unearned income” for high-income taxpayers. Unearned income includes capital gains.) To be hit by the 3.8 percent capital gains tax, you first have to be a married couple making more than $250,000 in adjusted gross income or $200,000 if you are single. The capital gain on the home sale must also exceed $500,000 if this is a primary home and you are a married couple ($250,000 for singles). So for example, even if you and your spouse make $300,000 in wages and you bought a home that you lived in for a while for $600,000 that you now sell it for $1 million, your capital gains tax on that home sale would be zero. Even if the home sold for $1.2 million, thereby resulting in a capital gain of $600,000, only $100,000 of that capital gain would subject to the new tax (because of the $500,000 exclusion).

For those who earn above those income thresholds ($250,000/$200,000) and who have a capital gain on a home that is a second home or one that does not qualify for principal residence (i.e., lived in for too short of a time period), the full capital gain would be subject to the new 3.8 percent tax.

Over time, however, if the health care reform and the tax code were never changed, more and more home sales would be subject to this tax. That’s because the $200,000 and $250,000 income thresholds in the health care reform bill were not indexed for inflation leading more and more people to qualify for having to pay the 3.8 percent tax on their investment income (including some home sales). Furthermore, the $500,000/$250,000 primary home sale exclusion amounts are not indexed for inflation, meaning that over the long-run as home prices grow with inflation, more primary home sales would be subject to capital gains taxes.”

Due to the high income thresholds and the $500,000/$250,000 primary home sale exclusion, I feel this media-worthy issue is not a concern within the Wausau Real Estate market. For our local Wausau market, stimulating the job growth and raising local consumer confidence should be of our greatest concern.

According to Harris Interactive the following reports what percentage of Americans participated in energy-saving activities within the past year:

Installed more energy-efficient light bulbs:  63%
Purchased energy-efficient appliances:  36%
Started paying bills online:  46%
Switched to paperless financial statements:  40%
Donated an electronic device for recycling:  41%
Switched from bottled to tap water:  29%
Installed a low-flow showerhead:  17%
Installed a low-flow toilet:  16%
Made home improvements that provided government tax credits:  14%
Purchased a more fuel-efficient car:  13%
None of these:  13%

If you would like to learn how you build green materials into your new home, please call me for a consultation:  715-581-9013

There are many areas of the country which may be more conducive to green building practices or where the concept has been more profound.  But, rest assured, the Wausau Real Estate market has demonstrated a genuine interest in making our homes more eco-friendly.

With the rising cost of utilities and the winter weather steadily approaching, many buyers are asking for utility reports and energy audits of the homes they are considering for purchase.  Both buyers and sellers would be advantaged to understand some energy saving features that would be beneficial to add value to a home, whether buying or selling.

According to Julie Hawkins’s article recently published in The Real Estate Professional magazine (November/December, 2009), “green” falls in three categories: energy efficiency, resource efficiency and improved indoor air quality.

Energy efficiency:  ENERGY STAR windows and doors, compact fluorescent lighting, appliances, programmable thermostats, efficient heating and cooling units, insulation, weather-stripping, tree placement and windows allowing good use of daylight.

Resource-efficient products:  products that use fewer natural resources, products made from recycled materials such as glass, carpeting or reclaimed wood, and products from rapidly renewing resourced like bamboo flooring.

Indoor Air Quality (IAQ):  Products that emit fewer pollutants such as low-or-no-VOC paints, cabinets and carpet, products to remove excess moisture such as whole house fans or ENERGY STAR qualified dehumidifiers.  Hard surface flooring far exceeds the quality over a carpeting floor.

Please contact me for a list of websites and valuable resources you can use to learn more about Eco-friendly home features to make your home more valuable within the Wausau Real Estate market.