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  • Steve Young 3:44 PM on January 30, 2015 Permalink | Reply  

    ‘Clearing Market’ is Good News, by Mark Dotzour, The Real Estate Center 

    During 2009 and 2010, the federal government was being encouraged to “do something” about the large number of families that were delinquent on their home mortgage.

    I’m sure that some of the people in my audiences then thought that I was very calloused and uncaring. But, being from the “old school,” I was suggesting at the time that the housing market would not return to normalcy until these houses were actually foreclosed and sold to other buyers.

    In a free market, this is referred to as “clearing the market.” Until the market clears, there is much uncertainty about the overhang of potential foreclosures. Buyers are hesitant to purchase, unless the discounts are substantial, because of concern about what happens when distressed homes finally come on the market.

    Looking back, we see that this logic holds. Housing markets in states with nonjudicial foreclosure have recorded a strong rebound in prices. States like New York, New Jersey, Florida, Illinois and Nevada are lagging behind.

    In my presentations back then, I suggested that our housing market has always been resilient. This is how the market has always worked:

    1. You miss your payments; you get foreclosed upon.
    2. You move into an apartment and rent for several years.
    3. When your credit is repaired, you buy another house.

    This logic still holds today.

    Here’s a real life story of how the market works. I was speaking in Las Vegas a few days ago to some commercial Realtors. I mentioned how the housing markets were finally clearing except in areas that had restrained the foreclosure process.

    After the speech, a young woman in her 40s came up to me and said she had filed for bankruptcy in 2010. She said she cried for a week before finally going through with it. She lost her business in the process.and now works in the commercial real estate industry.

    She wanted me to know that she had just bought another house. She was so excited and proud of the fact. She said she bought the house for $160,000. Initially the lender wanted a down payment of $17,000, but at closing, reduced it to $7,900. It was a conventional loan at current interest rates.

    This is really good news for the housing market. Thousands of people lost their homes through foreclosure in the past eight years. For several years after foreclosure, it can be hard to get a mortgage to buy another house. But the calendar pages just keep turning. Many of these people that have been shut out of the market to buy a home because of foreclosure or bankruptcy are coming back into the market.

    Capitalism works. The free market works.

    What is the market? It’s simply the amalgamation of the decisions and thoughts of millions of buyers and sellers each day. Government intervention can postpone reality, but in the end, the market will clear. The quicker this happens, the quicker we are on the road to recovery.

    I hope we don’t forget this next time.

    The Real Estate Center, Texas A&M University

  • Steve Young 2:07 PM on January 29, 2015 Permalink | Reply  

    Kids, Turtle and Fort Worth Stockshow 


                                     Such a fun looking picture…maybe not from the turtles point of view?

  • Steve Young 5:07 PM on January 26, 2015 Permalink | Reply  

    January 2015 Newsletter by Steve Young 

    Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.

    Please click on this link to view the Housing Trends January 2015 Newsletter:

    Steve Young’s Housing Trends Newsletter

    If you are interested in determining the value of your home, click the “Home Evaluator” link below for a free evaluation report:   Find the Value of your Home with Steve Young’s Home Evaluator Free Report

    Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future. handonChin

  • Steve Young 2:13 PM on January 26, 2015 Permalink | Reply  

    Happy birthday Wolfgang Amadeus Mozart (1756–1791) 

    Born on January 27, 1756, in Salzburg, Austria, Wolfgang Amadeus Mozart was a musician capable of playing multiple instruments who started playing in public at the age of 6. Along with his friend Joseph Haydn, Mozart conceived and perfected the grand forms of symphony, opera, string ensemble, and concerto that marked the classical period.

    I like most all his music and many favorites but tops would be Requiem in D minor and Symphony No. 40 in G minor.

    Enjoy!  .facebook_1926951352Untitled

    Two little friends I miss.

    P.S. They never knew each other!

  • Steve Young 12:59 PM on January 12, 2015 Permalink | Reply  

    Flipping Houses? Uncle Sam is Watching 

    Good article from The Real Estate Center By David Jones, Senior Editor,

    COLLEGE STATION, Tex. (Real Estate Center) – Flipping houses is not as popular as it once was, but there is still money to be made at it. As with any profitable venture, flipping is on the Internal Revenue Service (IRS) radar.

    “There was a substantial increase in flipping during 2014 in some areas of the country,” said Dr. Jerrold J. Stern, a research fellow with the Real Estate Center at Texas A&M University. “In the first quarter, Dallas and Houston flips were up 28 percent and 29 percent, respectively.”
    Flipping is typically assumed to have taken place when a house is sold less than a year after it is purchased.
    In August 2014, RealtyTrac reported flippers earned an average 21 percent gross return or $46,000 average profit. That was down from a peak of 31 percent in 2011.
    “To a large extent, the tax treatment of flipping depends on whether the IRS considers the flipper to be a real estate dealer or a real estate investor. Investor status is generally preferred by flippers,” said Stern, an accounting professor in the Kelley School of Business at Indiana University.

    “While the IRS uses a list of key factors to determine dealer-investor status for flippers, no single factor is determinative.”
    The most important factor may be the number of flips per year, he said. One flip does not normally indicate dealer status. As the number rises, however, so does the possibility the IRS will classify the flipper as a dealer.
    “Investor net income from properties held one year or less is considered short-term capital gain,” said Stern, “and generally taxed at ordinary income tax rates ranging from 10 to 39.6 percent. Such gains may be subject to an additional 3.8 percent investment income surtax depending on the level of the investor’s other taxable income.”
    In sharp contrast, dealer net income is subject to the regular income tax plus the 15.3 percent self-employment tax but not the 3.8 percent investment income surtax. The holding period is not relevant. The 15.3 percent tax rate is applied to the first $118,500 of adjusted net self-employment income.
    Dealers can deduct losses in full in the year of sale. Investors’ long- and short-term capital losses may be limited to $3,000 per year.
    For more on flipping, including taxation examples, read “Flipping Houses? Uncle Sam is Watching” in the January issue of Tierra Grande magazine, the Center’s flagship periodical. 

    Only thing I can add to this is…what in the heck is he NOT watching?

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