Going through a short sale or foreclosure or know somebody who is? Trying to buy a foreclosed home? The unofficial word on the street is get it closed before the end of the year. The Mortgage Forgiveness Debt Relief Act is not expected to be extended again. This means the deficiency in what you owe and are short of will be counted as income for your income taxes. This will likely cost you thousands of dollars.

Click on the link to learn about what is currently in place.

http://ceb.com/lawalerts/mfdr.asp?utm_source=on&utm_medium=la&utm_content=bk&utm_campaign=RE33920_41284_1

The difference in monthly payment (p&i) on a $200,000 mortgage if rates go from 3.4% to 4.4% is $114.56 per month. The Mortgage brokers association, Freddie Mac predicts rates will be at 4.4% by the end of 2013. Take $114.56x 30 years and you're looking at  paying $41,241.60 more for the same house if rates go up by 1%. What if they go up by 2%? Now would be a good time to get off the fence and make that purchase!

Effective April 1 there are some changes coming in the lending world that could impact you if you plan to use an FHA loan to purchase a new home. The cost of mortgage insurance is expected to go up and they will be decreasing the maximum debt ratio. What this means is that if you are planning on using an FHA loan (attractive b/c it only requires 3.5% for a downpayment) to purchase your next home it will be a little bit more expensive and a little more restrictive next month.

First-time homebuyers represent 39% of the people buying homes right now.  

The median age of first-time buyers is 31 years old.
55%  are married
11%  are single males
19%  are single females
15%  are unmarried couples

The trend continues! Whatcom County is now down to 979 current homes on the market. That’s 16.8% less inventory than the same quarter last year. The number of pending homes is up 27.7% and sold homes are up 23% compared to the same time last year. The shortage of inventory across the county should begin and already is driving higher prices.

Lynden continues to chart amazing numbers. Our inventory is now down to only 71 homes on the market. We haven’t seen this low of inventory in several years. Comparing the same month at the same time last year the available inventory is down 45.8%, pending homes is up 325%, and the number of sold homes is up 100%! It’s a great time to sell!

Rates on 30-year fixed-rate mortgages averaged 3.34 percent with an average 0.7 point for the week ending Jan. 3, down from 3.35 percent last week and 3.91 percent a year ago, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. Rates on 30-year fixed-rate loans hit a low in Freddie Mac records dating to 1971 of 3.31 percent during the week ending Nov. 21.

For 15-year fixed-rate mortgages, rates averaged 2.64 percent with an average 0.7 point, down from 2.65 percent last week and 3.23 percent a year ago. Rates on 15-year fixed-rate loans hit a low in Freddie Mac records dating to 1991 of 2.63 percent during the week ending Nov. 21.

One of the more watched provisions of the fiscal cliff was the Mortgage Forgiveness Debt Relief Act of 2007, which was set to expire on Dec. 31.

The fiscal cliff deal extends it for another year, meaning homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale are exempt from being taxed on the forgiven amount.

Good news if you're currently going through a short sale.

Have you been watching the stock market lately? Yikes! How much has it gone down since the election?  Wondering where to invest your money?

Financial Return When measuring financial return alone, real estate has fared far better than the stock market in recent years. Between 2000 and 2011, real estate provided an average Return On Investment (ROI) of 43 percent, while the Standard & Poor index lost 12 percent. Between 1999 and 2004, real estate increased 56 percent, while the S&P lost 6 percent.

Financial Risk Historically, real estate has been a far less risky investment than stocks. The largest annual decrease in real estate prices might be on the order of five percent. For stocks, the price declines can be 20 percent or more.

Tax Benefits As a homeowner, you're entitled to a bevy of tax benefits you don't get as a stock investor. You can usually deduct your home loan "points," mortgage interest, property taxes, home-office expenses, capital gains, and even moving expenses.

Something to think about.

Here are the numbers:

Whatcom County…a closer look

Last year we had 1,429 homes on the market in all of Whatcom County compared to 1,186 this year at the same time. That’s a 17% decline in inventory. Even with lower inventory homes continue to be selling much faster than less year. During the month of Oct sales were up 35.5% compared to last year and the number of pending sales was increased by 51%!

Lynden….let’s decipher the numbers.

Wow is inventory dropping!!! Last year in the month of Oct there were 150 homes on the market.  In 2012 during the same period there were just 92. That represents a 38.7% decrease. Sales were up 16.7% and pending homes were up a whopping 314.3%!!! Great news for sellers!!!

Bellingham…is anything different?

Nope. Same story. In Oct of 2011 we had 491 homes on the market compared to 397 at the same time this year. That’s a 19.1% decrease of homes for sale. Any guess as to whether homes are selling better than last year? Yep big time. In Oct sales were up 31.6% year over year and the number of pending homes is up 70%!!

Thinking of selling? It may finally be time to get your home listed. Thinking of buying? With the best interest rates we have ever seen I wouldn’t waste any more time! Give me a call and let’s chat about it.

I was talking with some colleagues in my office how difficult it has been to find a suitable home for the buyers we are working with. We can't find anything. I sensed inventory is dropping but never took the time to find out just how much. Using Trendgraphics a 3rd party site that has all active, pending, and sold properties listed I was astonished to find out that we haven't had this low of inventory in over 5 years! It may be much longer even!  There are only 106 active homes for sale in Lynden. That gives us a 5.7 month absorption rate of inventory. Crazy low! Instead of taking your home off the market or even waiting until spring to list, now may be a fantastic time to try and get it sold. With interest rates hovering around 3% it would be foolish to wait any longer. Better get on it! Call me today if you want to discuss your own personal situation.