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Saturday, December 22, 2012
Wednesday, December 12, 2012
Tuesday, December 11, 2012
November Stats 2012 from Outer Banks Board of Realtors
YTD Sales are up overall 23%, although sales have slowed due to Sandy and lack of adequate access to Hatteras Island. OBAR- says the sales are down on Hatteras Island 46% from October 2012 to Nov 2012. The best selling properties range b/n 200k and 299k range and usually on the market for an average of 210 days.
Monday, November 26, 2012
October 2012 Stats for Duck NC from Outer Banks Board Of Realtors
Duck Village is a beautiful spot on the outer banks and it has the highest average median price out of all townships(calculated from 2009 until 2012). Duck is $550,563 and Corolla's average is $536,559. The number continues to go down as you move south. Southern Shores is the 3rd highest average in median sales price and Nags Head is 4th.
The median sales price in Duck is down 17% from the median price range in 2011, however the number of homes sold in October 2012 was the most number of homes sold in Duck in years for October. I tried to calculate as far back as our MLS would let me, and could not find a higher number sold in October. This number even beat the homes sold in October of 2005 when there were only 9 homes sold.
What's this mean to our market? This tells us buyers are definitely here and investing in OBX real estate. Values are the lowest we've seen in years, and interest rates are at historical lows, so why not take advantage of these values if you're a buyer. If you're a seller and NEED to sell, price your house accordingly as you will get an offer. As we saw in last post over all inventory is down on the outer banks which is great news for our sellers, as they don't have the competition they had last year at this time.
Tuesday, November 20, 2012
Corolla Stats by Outer Banks Board of Realtors
Overall stats for October are good as far as inventory and sales go. Sales are 21% compared to last year at this time. Land/lots are leading at 48%. We're seeing more clients building custom homes, and spec builders are getting back in the game. If you look at the stats you can see active inventory has been on a decline since 2007. This is great news for sellers as it's usually the first sign of a changing market. Moving from a buyer's market to eventually, a sellers market. Another "sign" for a changing market is the number of distressed sales. Last year at this time distressed sales made up just under 40% of our sold volume, however today it's contributing to 26% of residential sales. If you are a buyer or know anyone looking to buy on the outer banks please share this information as we're in a market that's moving slowly away from a buyers market. Interest rates are at a historical low, and prices on the outer banks are at tremendous values. Now is the time to buy, don't look back and think, as I've heard so many times before in open houses, I should a, could a, would a, but didn't.
There were 18 units that sold in October 2012, as compared to 13 in 2009, and 13 in 2011. Corolla's median price for October was $501,000 in 2012. In 2009 the median price was $531,188 and 2011 $527,000, a 5% decrease since 2011.
It's a great time to be a buyer/investor, so get in the game while the getting is good.
Check back in a few days for more information/stats on other towns on the OBX.
Thursday, November 15, 2012
FLOOD INSURANCE- IMPORTANT NOTE!!!
After a major storm buyers can be reluctant to invest in coastal areas, which is a valid concern, especially after Hurricane Sandy. Steve Bonday with Banker's Insurance helped me in clarifying any concerns a future buyer may have, so THANK YOU Steve. Please see Steve's contact information for further questions or concerns. Steve is VanderMyde Real Estate's "go to professional" for all insurance needs.
Steve writes-
There may be some miscommunication out there after Hurricane Sandy – not really uncommon after a major storm.
One of my thoughts could be for folks that did not carry a flood policy in the past, and have now decided to carry one.
In this situation, we can write a flood policy for that homeowner, however, there will be a 30 day waiting period before the flood policy becomes effective.
This is also the case with anyone buying a home and paying cash.
I will add to Steve's comments above that I've recently found ways around the 30 day wait period with cash offers, thanks to my co worker at REMAX Ocean Realty Dick Thompson. Dick had this challenge with a buyer client,and had his client take out a small equity line, or loan on the property ,so the buyer would have flood insurance the day of closing. His buyer client then paid off the small loan and continued with flood insurance that was currently in place.
Also, especially for folks up north, most insurance agents around the country are really not that familiar with quoting and writing flood insurance.
It would not surprise me if clients are being misinformed by agents that do not have a lot of experience writing flood insurance.
There are many rules and regulations that are difficult to understand, especially if you are from a area that does not experience a lot of flood claims and have “special hazard flood zones” (AE, VE, etc) like we do.
I think there are many of our local agents, who have a hard time with flood insurance, as the government changes the underwriting guidelines from time to time.
Myself included, but I have put a lot of effort in trying to understand the policy as best as I can.
The most important take away for your clients is:
1) We can write flood insurance on the OBX.
2) We can write excess flood insurance here.
3) We can place homeowner policies here – including homes that will have weekly summer rentals.
4) We can place the wind policy that follow the “form” of the homeowner policy here.
5) We can place a dwelling policy, but I do not like these policies and highly recommend the homeowner policy form.
6) We can provide high liability limits as needed.
7) If a home is located in a CBRA flood zone (Carova for example) – we can place a flood policy.
8) We can often “grandfather” a flood policy if we have a copy of the original EC.
We can also grandfather – if we can find the old flood map that was in place at the time of construction.
This week, I had a client tell me they were no longer interested in an oceanfront listing in Corolla b/c they could not get flood insurance,so I reached out to Steve to give further explanation as you can get flood insurance in Corolla. This was his reply-
We can definitely write a flood policy thru the National Flood Insurance Program (NFIP) for Corolla.
In addition, we can place a excess flood policy on these homes.
I have been trying for several years to make clients aware of the excess flood policies, and how they can provide the extra flood coverage needed to properly insure the home.
In essence, the excess flood policy can “fill” the gap between the insured value of the home, and the maximum flood limit from the NFIP of $250,000.
For example:
If we want to insure a home for $500,000 for the homeowner policy.
The flood policy thru the NFIP can write a policy with a $250,000 maximum limit.
Most mortgage companies will only require the NFIP limit of $250,000, but that would not cover the cost to rebuild the home, if it was damaged/destroyed by the peril of flood.
A excess flood policy can be written for $250,000 – which would bring the total insured limit for the peril of flood up to $500,000.
In addition, the excess flood policy is on a replacement cost basis.
We cannot change the valuation basis of the NFIP policy, but if the home had damage that reached the excess flood limit, it would be on a replacement cost basis.
Note:
The NFIP policy valuation is replacement cost for a Primary home, and it is Actual Cash Value (ACV) for a second home.
ACV is depreciated cost, and most of the homes here are second homes.
Last, many of the homes in the Corolla area were built before the current flood map was placed.
Many of these homes have ground floor enclosures that include heated living space – game rooms, bedrooms, etc.
I have “grandfathered” many of these homes back to the old “C” flood zone that was in place at the time the homes were built.
By doing this, the flood policy coverage starts on the ground level floor.
Steve Bonday's contact information -
Steve Bonday CIC, CBIA, AIP
Insurance Sales Executive
4713 N. Croatan Hwy Kitty Hawk, NC 27949
PO Box 2589 Elizabeth City, NC 27906
(252) 331-8233 I direct dial
(252) 441-0810 I office
(252) 441-0355 I fax
Tuesday, November 13, 2012
Inventory down, Ticker says the lowest in 50 years.
THE TICKER
New homes for sale near lowest level in 50 years
Posted by mhopkins on 10/31/12 at 8:41am
Housing inventory neared its lowest level over the past 50 years in October at 4.5 months, according to Pro Teck Valuation ServicesOctober Home Value Forecast Update.
“The U.S. housing market has entered a sustainable period of improving conditions led by very low mortgage rates, stable to rising home prices, declining unemployment, declining housing inventories and a strong rental market,” said CEO Tom O’Grady.
Low inventory levels are often reflective of significant price appreciation in the year to come. “The primary reason for the low months of remaining inventory for new single family homes is the historically low number of new homes for sale,” added O’Grady.
Nationwide new home prices have held up better than the price of existing homes, the update uncovered. According to O’Grady, the divergence in the recent down-cycle, despite new and existing home prices having tracked one another closely since the 1960s.
The most recent numbers revealed the median new single-family price has decreased less than 1% to $256,900 since its peak in 2006. Adversely, the national median existing single-family price has fallen 20% to $183,900 since peaking in 2006.
The October Home Value Forecast includes a list of the 10 best and 10 worst performing metros, according to a market condition-ranking model. “The top ranked metros are located in Texas and one is in Oklahoma, which confirms the strength of the real estate market in this part of the country,” said Michael Sklarz, Principal of Collateral Analytics and contributing author to Home Value Forecast.
Saturday, November 10, 2012
Beautiful and Busy day on the Outer Banks
Thanks to Mark Harvey for a photo of another gorgeous day on the outer banks!
What an amazing day on the outer banks today November 10,2012. The sun is shining, the shops and restaurants are full. The Outer Banks Marathon festivities have begun and the actual marathon will start tomorrow at 7am. Thank you to all the visitors and participants that visited our beautiful piece of paradise this weekend.
Wednesday, November 7, 2012
CNN MONEY-- Fannie Mae and Freddie Mac providing relief for victims of Sandy
Mortgage relief coming for disaster victims
@CNNMoney November 5, 2012: 4:34 PM ET
Owners of homes like this one in Westbury, N.Y. may qualify for mortgage relief.
NEW YORK (CNNMoney) -- Relief is coming to homeowners hit hard by Superstorm Sandy, as government agencies and major lenders roll out plans to offer them breaks on mortgage payments and other types of financial assistance.
Earlier this week, Freddie Mac (FMCC, Fortune 500)and Fannie Mae(FNMA, Fortune 500) told the companies that service their loans that they can offer assistance to borrowers whose homes were damaged, or who lost income as a result of the storm.
Some borrowers with loans backed by Freddie Mac will be able to delay their mortgage payments for up to one year, according to spokeswoman Tracy Mooney.
Freddie's servicers can offer forbearance of up to 90 days on the basis of nothing more than a phone call from the homeowner. For help beyond that time frame, borrowers will have to document their losses with insurance claims, photos of damage, contractor's bills or other proof.
Fannie, meanwhile, will suspend or reduce homeowners' payments for up to 90 days if the storm has affected their ability to make payments or caused their property to lose value. And services can grant borrowers additional time after evaluating their individual situations.
The two mortgage giants, which back about 70% of all U.S. home loans, also offered up other types of assistance, including waiving late fees, postponing foreclosures for up to 12 months and not reporting late payments to credit bureaus.
"We understand the disruption that a storm such as Sandy can have on people's lives, and we've made it easy for our servicers to offer relief to those who need it," said Leslie Peeler, senior vice president, for Fannie.
In addition, Department of Housing and Urban Development Secretary Shaun Donovan authorized a 90-day moratorium on foreclosures for loans insured by the Federal Housing Administration (FHA).
Private lenders, like JPMorgan Chase (JPM, Fortune 500), Citibank(C, Fortune 500)and Wells Fargo (BWF), are offering to postpone payments for up to 90 days for customers in impacted areas who seek assistance.
Citibank is also suspending foreclosure sales within federally-designated disaster areas for 90 days and waiving late payment charges for borrowers unable to get mortgage payments in on time.
Wells Fargo advised mortgage customers affected by Sandy to contact the bank immediately to discuss mortgage payment arrangements, or to get assistance with handling property insurance loss claims.
Additionally, the Small Business Administration has said it will provide loans to both homeowners and renters affected by Sandy; recipients don't have to be small businesses. Disaster loans up to $200,000 are available to homeowners from the SBA to repair or replace damaged or destroyed real estate. Homeowners and renters are eligible up to $40,000 to repair or replace disaster-damaged or destroyed personal property.
It's difficult to calculate how many borrowers will take advantage of these relief efforts, said Andrew Wilson, a spokesman for Fannie Mae. Eqecat, an insurance risk researcher, estimates that Sandy caused up to $50 billion in economic damage and $20 billion in insured losses. There are more than 893,000 mortgages backed by Fannie or Freddie in New Jersey alone, and nearly 10% of those, 83,000, are in some stage of delinquency. Many of those are presumably in need of relief.
There are an additional 212,000 homes with FHA-insured mortgages in Tri-State areas that have been declared disaster zones, which are eligible for assistance if they sustained damage. 
Monday, November 5, 2012
Last 30 day Feed from List Hub
Sunday, November 4, 2012
Wall Street Journal Article about 3.8 % surtax on investment income.
It really is happening.
Until this week, investors were waiting to see what the Supreme Court would do about the 3.8 percentage-point surtax on investment income, part of President Obama's health-care overhaul. The Internal Revenue Service hasn't yet released guidance on the new tax.
So when the court affirmed the law on Thursday, investors—and tax advisers—started scrambling.
Associated Press
Dr. Nadya Hasham, a professor at Touro College of Osteopathic Medicine, examines Glenn Johnson at New York's Touro College Family Health Center on Wednesday.
The new tax, which Congress passed in 2010, affects the net investment income of most joint filers with adjusted gross income of more than $250,000 ($200,000 for single filers). Starting on Jan. 1, 2013, the tax rates on long-term capital gains and dividends for these earners will jump from their current historic low of 15% to 18.8%, assuming Congress extends the current law.
Streaming Live: Health-Law Decision
![[image]](http://si.wsj.net/public/resources/images/OB-TK448_0618sc_A_20120618103236.jpg)
Associated Press
Real-time updates, analysis and reaction on the Supreme Court's decision to uphold the health-care law. Click here to see full coverage of the decision.
If, on the other hand, Congress allows the tax rates set in 2001 and 2003 to expire on Dec. 31—an unlikely scenario, according to many experts—the top rate on capital gains will rise to 23.8% and the top rate on dividends will nearly triple, to 43.4%.
Whatever the fate of the 2001-03 tax rates, advisers are telling clients to start making moves to minimize the new levy.
Beatrice Mitchell of Sperry Mitchell in New York, a broker of middle-market businesses, says she expects that entrepreneurs looking to sell companies will hurry to do so this year and forgo installment sales, in order to avoid paying the 3.8% surtax.
"Business sellers haven't been paying attention to this tax, but now they are," she says, adding that one client, the head of a 2,000-employee firm, "is in shock."
What It Means for Consumers
![[image]](http://si.wsj.net/public/resources/images/OB-TO234_0628hc_A_20120628105159.jpg)
The health law's future depends on which party controls the White House and Congress after elections in November. Read More.
The new levy's ramifications extend far beyond the end of the year, however, and will be a game changer for many taxpayers. In the future, affluent investors will need to manage both their adjusted gross income and their investment income in order to minimize this tax, says CPA Dave Kautter of American University's Kogod Tax Center.
Many will likely seek more shelter in assets and structures where the tax doesn't apply. Municipal-bond income is doubly blessed because it doesn't raise adjusted gross income and isn't subject to the 3.8% tax, notes Jonathan Horn, an accountant in New York.
Related Video
The D.C. Bureau Roundtable on how the Supreme Court delivered the ruling that no one in Washington was expecting, and what it will mean for the presidential election.
On D.C. Bureau, Rep. Chris Van Hollen handicaps how the GOP's latest assault on the health-care law will play out, and shares his playbook to help beleaguered Democrats win over the law's skeptics. Photo: Getty Images.
Stephanie Cutter, deputy campaign manager for Obama 2012, joins Jerry Seib on D.C. Bureau to discuss the aftermath of the Supreme Court ruling on the health-care law, and how it will affect re-election efforts.
"This [3.8%] tax alone makes accelerating investment income into 2012 profitable for many taxpayers," says Robert Gordon of Twenty-First Securities, a tax-strategy firm in New York.
Also attractive for the same reasons: Roth individual retirement accounts, which differ from regular IRAs in that withdrawals are tax-free. "I'm telling my clients who have been considering converting from a regular IRA to a Roth IRA, 'Do it now,'" Mr. Horn says.
Others will turn to traditional defined-benefit pension plans. Older taxpayers who are eligible to set up such a plan for themselves—for example, because they have income from a business—can take large deductions that reduce their adjusted gross income. Payouts from such plans aren't subject to the 3.8% tax, although they do swell income in a way that could help trigger the tax on other investment income.
Here are answers to some basic questions about the tax. For more detail, consult a tax professional—but give it a few weeks so that he or she can get fully up to speed:
How does the 3.8% tax on investment income work?
It applies to most joint filers with adjusted gross income above $250,000 and single filers with adjusted gross income above $200,000.
Adjusted gross income is the number at the bottom of the front page of form 1040; it includes interest, dividends, capital gains, wages and retirement income plus results from partnerships and small businesses, but it doesn't include subtractions for itemized deductions such as mortgage interest and charitable gifts, or personal exemptions.
The new levy is complex, but in effect it is a flat tax on investment income above the $250,000/$200,000 threshold. Note that while the tax applies only to investment income above the threshold, other income—such as wages or Social Security—can raise adjusted gross income, making investment income more vulnerable to the tax. (See the examples below.)
How is "investment income" defined?
A new front opened Friday in efforts to reshape how the federal government implements President Barack Obama's health-care overhaul now that the Supreme Court has ruled to keep the law in place. Louise Radnofsky has details on The News Hub. Photo: AP.
Absent guidance from the IRS, experts believe the tax applies to dividends; rents; royalties; interest, except municipal-bond interest; short- and long-term capital gains; the taxable portion of annuity payments; income from the sale of a principal home above the $250,000/$500,000 exclusion; a net gain from the sale of a second home; and passive income from real estate and investments in which a taxpayer doesn't materially participate, such as a partnership.
The tax doesn't include payouts from a regular or Roth IRA, 401(k) plan or pension; Social Security income; or annuities that are part of a retirement plan. Also not included are life-insurance proceeds; municipal-bond interest; veterans' benefits; Schedule C income from businesses; or income from a business on which you are paying self-employment tax, such as a Subchapter S firm or a partnership.
What are some examples of when the tax would and wouldn't apply?
Example 1: A married couple filing jointly has $400,000 of adjusted gross income—$240,000 of wages plus $160,000 of investment income composed of interest, dividends and net gains from the sale of raw land. Because they have $150,000 of investment income above the $250,000 threshold, they would owe an extra 3.8% of that amount, or $5,700, in tax.
Example 2: A retired couple filing jointly has no wages but does have taxable IRA payouts of $100,000, plus pension and Social Security payments totaling $60,000. They also have dividends and taxable interest of $40,000, plus $40,000 from the sale of two investments. They owe nothing, because their income is below the $250,000 threshold.
Example 3: A single taxpayer earns $60,000 of wages but nets a windfall of $180,000 from the sale of a long-held investment. Because she has $40,000 of investment income above $200,000, she owes $1,520 of extra tax.
Example 4: A single taxpayer has income of $220,000, but all of it comes from Social Security benefits and pension and regular IRA payouts. None of the income is subject to the 3.8% tax.
How would the 3.8% tax apply to the sale of a principal residence?
It would apply if the net gain on the sale exceeds the $500,000 exclusion for joint filers ($250,000 for singles) and the taxpayer's income also exceeds the adjusted gross income threshold.
For instance, suppose a couple bought a residence long ago for $100,000 in a high-cost city such as New York or San Francisco. In 2013, when they have wages of $100,000, they sell the home for $1.5 million. After subtracting the $100,000 cost of the home and the $500,000 exclusion, they have investment income of $900,000. That plus their wages puts them $750,000 over the $250,000 AGI limit, and they would owe $28,500 in extra tax.
If, however, a single person bought a house many years ago for $50,000 and sells it for $350,000 next year, after subtracting the $50,000 cost and the $250,000 exclusion, the investment income is $50,000. If this taxpayer has $150,000 or less of other income, no extra tax will be owed. But if he earns $150,000 of wages and has $20,000 of dividends and interest, then he would owe extra tax on $20,000, or $760.
More Weekend Investor
What happens if a taxpayer has adjusted gross income above the threshold that is then reduced by a large itemized deduction—such as for medical expenses or a charitable gift?
The tax still applies.
For instance, an elderly taxpayer has adjusted gross income of $225,000 from interest, dividends, pension, taxable IRA payouts and Social Security, including $25,000 in interest and dividends. A combination of charitable gifts and deductible medical expenses nearly wipes out the taxpayer's taxable income. Still, the taxpayer would owe 3.8% tax on the $25,000 above $200,000, or $950.
Does the 3.8% tax apply to trusts and estates?
Yes, according to Kogod's Mr. Kautter. The tax applies to net investment income of more than about $12,000 that isn't paid out to heirs or beneficiaries.
Doesn't the health-care law also have an extra payroll tax for higher earners?
Yes, and it is historic because it adds a progressive element to what has always been a flat tax. The change raises the Medicare tax by 0.9% (from 1.45% to 2.35%) on wages and self-employment income above $250,000 ($200,000, single). Unlike Social Security taxes, the Medicare tax is uncapped. The new levy has no deductible component for self-employed taxpayers.
For example, each partner in a married couple earns $150,000. Currently, each owes 1.45% of Medicare tax—$2,175—and their employers owe a matching amount. In 2013, the couple will owe another 0.9% on $50,000, or $450. The employer isn't responsible for withholding it.
Got all that? The new rules present big challenges for taxpayers. But if you start thinking about them now, at least you can minimize the damage.
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