By JIM PARKER
The Post and Courier
The real estate circular that agent Michelle Whitbeck periodically posts nearlyalways includes at least a smattering of up-to-date housing information.
But the most recent edition of Lowcountry Real Estate Update is particularly detailed on the local market and its outlook for the new year.
Whitbeck, a Realtor with Keller Williams in Mount Pleasant, cites the impact on real estate taxes as the result of Congress’ agreement to spare the country a fiscal cliff-dive. She spotlights greater Charleston’s sizable percentage of all-cash home sales. And she showcases figures on home price fluctuations in local communities.
According to Whitbeck’s report, real estate tax considerations for homeowners stem from federal extensions to existing codes. They are:
• Retaining the Mortgage Forgiveness Debt Relief Act to Jan. 1, 2014. The act waives taxes on real estate debts forgiven in mortgage refinancings, foreclosures, or short sales. She says, “This is a big one for sellers who know they have a short sale situation” — in which the sale proceeds aren’t enough to pay off the mortgage but the lender agrees to write off the difference.
“You have another year to try,” she says. “Just don’t wait to get it listed because short sales take months to get approved by the lender and close.”
• Continuing to permit tax filers earning below $110,000 to deduct mortgage insurance premiums. Lenders typically require mortgage insurance when the down payment is 20 percent or less. The extension is through this year and retroactive to 2012.
• Allowing homeowners to still take a 10 percent tax credit up to $500 for making energy improvements to existing properties. It extendss through 2013 and is retroactive to last year. Items eligible for the credit include biomass stoves; windows and doors; energy saving insulation; heating, ventilation and air conditioning units; roofs; and non-solar water heaters.Meanwhile, contractors or developers can get a tax credit of up to $2,000 when constructing or renovating homes, condos or apartments that are energy efficient.
Separately, Whitbeck says that many Charleston area buyers are paying cash to buy homes.
“I had a feeling cash buyers were on the rise this past year just from my own experience of taking buyers out and going up against cash buyers on multiple offer situations. Boy, was I surprised to see the actual statistics on how many cash deals closed in 2012!”
She says that 41 percent of all real estate transactions in metro Charleston were financed with cash, which is double the share in 2007. By comparison, all-cash deals were 27 percent of sales nationwide as of August.
Whitbeck suggests two reasons for the rise in all-cash transactions: Buyers are paying cash due to tight lending conditions, which makes it harder to get a mortgage; and increased sales by investors — who may be eager to cash out.
Also influencing totals is an increase in international buyers, who can’t always secure a loan when purchasing a home in the U.S. “National Association of Realtors research shows that 62 percent of international purchases were all cash,” she says.
In a study last year, the Realtors association cited two possible funding sources for all-cash deals.
The 2012 NAR Home Buyers and Sellers Profile found that 40 percent of repeat buyers use their primary-residence sale proceeds to make a down payment on a new residence. Downsizing boomers may do even better post-sale, winding up with enough equity left to pay all cash.
Meanwhile, a down payment source for 10 percent of buyers are stock sale proceeds or retirement account funds. “Those with stable jobs and who saw investment gains in recent years may be using those cash funds to buy a home outright rather than financing the purchase,” Whitbeck says.
In her latest Lowcountry update, the Realtor also provided figures on midpoint prices that buyers paid for homes last year in various sectors of greater Charleston.
Most regions, she says, saw a boost in the median sales prices from 2011. Folly Beach experienced the biggest jump, up 26 percent to $417,500, while Sullivan’s Island and the Isle of Palms showed the steepest drop, off 12 percent to $659,000.
Here are the median home prices and price changes in other sectors: Daniel Island at $457,250, up 13 percent from 2011; downtown Charleston at $375,000, up 10 percent; James Island at $207,000, up 10 percent; West Ashley at $186,750, up 7 percent; Summerville at $168,000, up 5 percent; Goose Creek-Moncks Corner at $161,000, up 5 percent; Hanahan at $174,000, unchanged; Mount Pleasant at $309,000, down 1 percent; North Charleston at $104,000, down 1 percent; and Wando at $175,000, off 5 percent.
For more information, visit http://a245030.yourkwagent.com.
Reach Jim Parker at 937-5542 or firstname.lastname@example.org.
This close-to-200-year-old home on Judith Street has a “mortgage knob,” installed to show the property had been paid for. Mortgage insurance deductions are still permitted under Congress’ last-minute agreement to avoid the fiscal cliff. (Photo by Robert Behre/Staff).×
A house in the New Rider neighborhood in North Charleston got new insulation. Under an extended federal law, people can receive an up to $500 tax credit for installing energy-saving insulation (Photo by Grace Beahm/Staff)×