Homes Are At Their Lowest Price Point In A Decade

Home prices fell to their lowest point in more than a decade in January, which helped to lift the pace of home sales, according to a report from an industry trade group. The National Association of Realtors reported that the median home price in January fell 2% from December to $154,700. That's the lowest price reading since November 2001, before the run-up in home prices that became known as the housing bubble. The median price is the point at which half of homes are sold for a higher price, and half are sold at a lower price.  Serving as a drag on existing home prices is a large inventory of homes in foreclosure. Distressed home sales, which includes homes in foreclosure and so-called short sales in which the home is sold for less than what is owed on the mortgage, made up 35% of sales in January.  But the pace of sales rose to the highest level since May of 2010, helped by the low prices and rock-bottom mortgage rates. The seasonally-adjusted annual sales pace of 4.57 million homes was up slightly from the revised 4.38 million in December. The last time homes sold at that pace, buyers were rushing to qualify for an $8,000 homebuyer's tax credit that was about to expire. The housing market has been showing signs of recovery in recent months. The combination of low mortgage rates and a decline in home prices means homes are more affordable than they've been in decades.

Best Part Of Being A Homeowner-TAX BREAKS!!!!

There are two things you can count on when you become a homeowner: You get more tax breaks, and your taxes get more complicated. Whether you’ve purchased a single-family home, townhouse or condominium, tax breaks are available to you.

It’s time to get familiar with Form 1040 and Schedule A, because that’s where you will have to provide all the details about your new tax-deductible expenses. To take advantage of these tax breaks, you have to itemize your deductions. If this is the best choice for you, here some of the expenses you can deduct:

Mortgage interest. Owning a home allows you to deduct the interest you pay for your mortgage. This is usually the biggest tax break for most people, because a significant amount of your house payment goes toward interest during the early years of a mortgage. You can deduct all the interest you pay unless your loan is for more than $1 million. This includes any interest you pay on a loan to buy your home and, with some limitations, the interest on a home equity line of credit or home equity loan. There are two conditions you must meet to get this deduction. You must file Form 1040 and itemize deductions on that form's Schedule A. The mortgage is a secured debt on a qualified home in which you have an ownership interest.

Points. When you finance a home, you may pay what are called "points." Points lower the interest rate on your mortgage by effectively prepaying a portion of the interest at closing. Points are paid by the borrower to the lender as part of the loan deal, and they are a percentage of the loan. Points may also be called loan origination fees, maximum loan charges, loan discount or discount points.  Points are deductible as interest, but you generally can’t deduct the full amount in the year they were paid unless you meet certain requirements. If you aren’t eligible to deduct your points the first year, you can deduct them over the life of the mortgage. To determine if you are eligible, reference the exact guidelines provided by the Internal Revenue Service.

PMI premiums on certain mortgages. If you make a down payment of less than 20%, you are required to carry private mortgage insurance, or PMI. This type of insurance is paid for by the buyer but protects the lender in case the borrower stops paying on the loan. PMI premiums can be deducted if the mortgage was issued after 2006. This deduction is effective for premiums paid through 2011. There are no limits on the amount of PMI premiums you can deduct, but your income may reduce the deduction amount.

Tax savings on the gain when you sell. This one seems almost too good to be true. When you sell your home, the amount of your gain from the sale is tax-free if you meet the criteria. If you are married, you can earn up to $500,000 on the sale, and you won’t have to pay tax on the earnings. If you are single, you can earn up to $250,000 without paying any federal tax. There’s only one catch: You have to own and occupy your home for at least two of the past five years.

The Correct Way to Shovel Snow Around Your House

Snowfall can be a beautiful thing, but only for so long. At some point, you'll want to get it off of your home, sidewalk, deck or wherever else it blocks your way or poses a potential hazard. Professional snow removal services are often available, as are snowblowers. But if you're the old-fashioned sort, you'll get out the snow shovel and do it yourself--just make sure you're doing it the right way.

Preparations
Shoveling is hard work, so don't make it harder on yourself by drinking caffeine or smoking beforehand. Stimulants like these can increase your heart rate and put extra stress on it when you shovel.  If there's snow, it's cold, so put on several layers of clothes to start. As you shovel, take them off as need be. It's better to be overly warm rather than not being covered well enough.  You're probably going to sweat, so drink plenty of water before you go out. Sweating isn't a summer-only activity and dehydration is always a possibility.  Stretch your muscles by running or walking in place for a few minutes. Stretch your arms and legs, but pay particular attention to your back: bend forward, backward and to each side several times. You can also lie on your back and bring your knees to your chest to focus on your lower back.

Shoveling
Use a lightweight shovel with a smaller blade, preferably one with a bend in the handle because it will take some of the stress off your lower back. You'll lift less snow with a smaller blade, but also put a lot less strain on your body.  Go slowly and pace yourself. Hurrying to get finished can lead to overexertion and injury. Take frequent breaks.  Shovel snow shortly after it falls, if you can. It is lighter than packed, melting snow.  Stand so that your feet are even with your hips. Bend your knees, not your back, and keep the shovel close to your body. Push snow instead of lifting it, if that is viable for your situation. If you must lift it to remove it, scoop the snow into the blade, then use your stomach muscles and legs to lift it--not your back. Turn your entire body, not simply your torso, to dump the snow to either side.

Warnings
Shoveling snow can cause a quick rise in your blood pressure and heart rate. In fact, one study points out that two minutes of shoveling snow brought sedentary men's heart rates to levels higher than aerobic exercise.  Hypothermia--a decrease in body temperature--is always a threat in cold weather, even if you are working hard. Make sure you wear enough warm clothing and go inside to warm up as necessary.  Shoveling incorrectly--that is, using your back to lift--can cause back strain and even serious injury, especially if you do not engage in a regular exercise regime.

Josh Schwab
Broker Associate
Keller Williams Executives
303-324-1112