2014 is off to a Good Start! Our Buyer Agents are busy showing property and writing offers after a slower-than-normal Fall Season in Prescott. This is the third Winter in a row that we have seen this much activity. I’m often asked when the "Selling Season" is in Prescott and honestly, there isn’t one. It varies year to year. The weather has more to do with our market than interest rates. Dry winters are busy, wet summers are slower. The high exposure media coverage of the Prescott Hotshot tragedy precipitated our early slowdown in July of 2013. People didn’t hear "Yarnell", the actual location of the accident. They only heard "Prescott" Hotshots. The last time Prescott had a fire tragedy, our market was temporarily affected as well. Hopefully, this concern has already passed. Whether or not you live in the Hassayampa Village, their news affects our whole market. The Hassayampa Golf Course debacle is yet to be resolved and many buyers, who would move there if the Golf Club is salvaged or just want to be certain of what they are buying into, are in a holding pattern. The rumor is, there are two prospective buyers for the Golf Club and homeowners are told they could expect resolution soon. Additionally, an overall concern about the impact of the Affordable Care Act has a lot of buyers in the "wait and see" mode. Washington always trickles its troubles down to the basics of life – like buying and selling homes. The hot ticket item remains the newer single level Prescott home in the low to mid $300,000’s with a three car garage. Since these homes require a fairly level home site, there is a limit to the number that can be built in our mountain community. For the first time in many years, several of our 2013 sales were lot/home packages. Despite the year-end slowdown, our group had our best year since 2006 and Kathleen Yamauchi ranked #1 in 2013 Prescott Residential Listings Sold. We continue to emphasize thoughtful marketing and great photography.
I continue to receive questions regarding the 3.8% tax on real estate imbedded in the new Health Care Reform Bill going into effect in 2013. Misinformation has a lot of people unnecessarily concerned. The tax is not a sales transfer tax as many emails circulating the internet have suggested. Below is a quote from an article by the National Association of Realtors which will clarify exactly what this tax is.
“Now that the Supreme Court has upheld the health care legislation, all of its major provisions remain in effect, including the new tax that was designed to affect upper income taxpayers. The 3.8% tax is imposed ONLY on those with more than $200,000 of Adjusted Gross Income (AGI) ($250,000 on a joint return). The tax applies to investment income, defined as interest, dividends, capital gains and net rents. These items are all included in an individual’s AGI. A formula will determine what portion, if any, of these types of investment income would be subject to the tax.
The tax is NOT a transfer tax on real estate sales and similar transactions. Not long after the tax was enacted, erroneous and misleading documents went viral on the Internet and created a great deal of misunderstanding and made the tax into something far more draconian than the actual provisions.
The new tax does NOT eliminate the benefits of the $250,000/$500,000 exclusion on the sale of a principal residence. Thus, ONLY that portion of a gain above those thresholds is included in AGI and could be subject to the tax.”
How long rates will remain this low is anybody’s guess. But this chart demonstrates just how historically low interest rates are. Look at where rates were in the early nineties – then look what happened!
Click here to download 20 year interest rate chart
We hope this chart provides food for thought for anyone wondering if now is a good time to get off the fence regarding a home purchase or refinance.
Many of our out-of-state buyers have been asking questions about property taxes. Unlike California, for example, Arizona properties are not reassessed upon the transfer of property.
The formula for Yavapai County Property taxes is dependent upon various governmental entities’ budget needs. Each of these jurisdictions has taxing authority.
"For example, your property may be located within an incorporated city or town, a school district, a community college district, a fire district, and a special improvement district. All of those jurisdictions have taxing authority."
Budgets are published and budget hearings are open to the public to listen and to voice concerns. The following information is from the Yavapai County Assessor and is a very detailed explanation of how tax assessments are determined: Property Valuation Explained
The recent passage of Arizona HB2001 known as the "Jobs Bill" was crafted with the intention of making Arizona a more business-friendly state. But buried in the 214 page bill is wording that could mean higher residential property taxes for Arizonans.
Homeowners may be unaware that their residential property taxes are lowered by a payment made from the State General Fund directly to the county in which the property is located. This payment is paid to residential properties in Class Three of the property tax code. Class Three properties include owner occupied primary residences and second/vacation homes. Currently, the rebate happens automatically without the homeowner having to apply for the tax reduction. Each homeowner can locate their home’s annual rebate by looking at a past year’s property tax bill for the words, "State Aid."
See Full Article
Prescott sales statistics for February: download PDF
I’ve been receiving a few emails of outrage about the coming sales tax on real estate.
In response to the false statements and misunderstandings regarding this real estate sales tax written into the Obama health care bill, here is an article describing the facts of this tax. While it has no business being in a health care bill, it is considerably less onerous than is being reported.
There’s been a lot in the news this week about the Robo signing scandal.
Three major lenders, Bank of America, JP Morgan Chase, One West Bank and GMAC, have temporarily suspended foreclosures in 23 states, states where foreclosures require a judicial process. (Arizona, like California, is not among them). These banks have admitted that their employees, due to sheer volume, have routinely sign scads of foreclosure documents without verifying their information. This Forbes report explains further:
A new online tool has been made available to Prescott Area Realtors named RPR for "Realtors Property Resource".
This collection of public records information combines with our local MLS to increase instant data at our finger tips. All this is intended to make the Realtor even more proficient as answers to typical real estate questions will be gathered in one location. Our new system goes live tomorrow.
With over 87% of home buyers citing the internet as being most important in their home search, quality photography has become a key element to making yours stand out—and even sell for a higher price according to this article from The Wall Street Journal. In fact, a good picture can make a difference of thousands of dollars—or whether your home even gets noticed at all. So, what can you do to help ensure the best photos possible?
Presentation, Presentation, Presentation
On top of the usual Saturday-morning vacuuming, dusting, mopping, sweeping and straightening, here are some presentation tips you can do to prepare your home for professional real estate photography:
- – open all blinds and drapes
- – all lights ON and make sure no bulbs are out
- – all ceiling fans OFF
- – de-personalize by removing family photos
- – remove all Kleenex tissue boxes
- – hide remote controls
- – get windows professionally cleaned
- – remove counter clutter like bills, pen jar, phone wires
- – remove dishes, soap bottles, rags
- – remove everything from the outside surface of the fridge (magnets, clips, notes… everything)
- – remove little floor mats
- – remove oven handle towels
- – remove dog bowl
- – remove all personal items and clutter from countertops
- – clean mirrors and shower doors
- – remove little floor mats
- – remove towels from shower door
- – remove trash cans
- – remove vehicles, trash/recycle cans from front
- – straighten, uncover and put cushions on outdoor furniture
- – uncover the grill
- – open patio umbrellas
- – hide garden tools, hoses and childrens’ toys