4th Quarter Housing Stats Indicate Steady Real Estate Market Recovery

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It’s not a sprint; it’s a marathon, and it has  pushed the United States out of the Recession with its influence on the employment market and loosening credit requirements.  Even though, technically the real estate market was partially responsible for the crash that set in the largest Recession the world has seen since the Great Depression, the1-1049-cypress-crossing-drive-exterior-front recovery of the real estate market was a big part of fixing what was broken with the economy.  However, the upward climb has been, as cautiously predicted by economists, a sometimes painfully slow one as housing has been gaining traction over the course of 1.5 years.  Once the bottom was hit, and the market “turned” back upwards, the growth has been unstoppable which is why 4th quarter, 2014 housing stats indicate steady real estate market recovery numbers instead of “record-breaking” substantial growth.  The only sharp increases that the recovering home market has seen were the unprecedented jumps in home values for many months during 2013 and 2014.  Rising house prices were good news for existing homeowners looking to sell or existing homeowners trying to get out from “underwater” in their existing home loans, but they were a cautionary tale for Wall Street which feared a “double-dip” Recession.

As home prices have leveled off, and mortgage interest rates have continued to remain low, and existing and new 156-st-calais-place-exterior-1home sales have seen record-breaking months; all signs point to the real estate market returning to normal levels in a couple to a few years from now.  Even though this may not seem fast enough for some people, it is still really good news for the struggling economy and job market.  Housing affordability wnet up to 62.8% of new and existing homes for a “typical” family in the US earning approximately $63,900 in household income in the 4th quarter.  The Leading Markets Index (LMI) which measures a comparison of current market conditions to “normal” market conditions – Pre-Recession – showed that 69% of the 350 tested markets showed improvement of real estate conditions from 4th quarter, 2013 to 4th quarter 2014.  11 markets have met or exceeded normal conditions in 2014.  Finally, new home sales in January, 2015, went down only .2% from the previous month which is definitely a good sign as the harsh winter conditions should have vastly affected these numbers.  The supply of new homes on the market to sell was only a 5.4 month supply which is considered normal and sustainable.

Overall, the real estate market continues to move steadily forward with gains and increases occurring either every month or every quarter according to what is being predicted by economists.  The only way to turn this marathon back into a sprint would if there were tremendous recovery signs in the United States employment market which include substantial wage increases, people flooding back into the job market, the availability of full time employment, and a jump in the creation of new jobs.  This, more than anything, would create a stronger and faster recovering real estate market nationwide.

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Energy Efficiency Saves in Small Measures

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In order to have a proper perspective of how much energy saving measures will have in your new or existing home, you have to know the paramenters of energy saving capability as well as have the right expectation for the process going into it.  If you live in a much older home, built in an older neighborhood during a time when real estate was not as “coded” as it is today, you can expect to see a more dramatic increase in savings after spending more money up front to make changes.  This is because building codes are truly on the cutting edge of emerging green techniques which are constantly promoting more structurally sealed homes with low-energy, efficient technologies installed in them.  The savings really do add up, though, through a combination of several energy saving techniques.  Home buyers and homeowners can be assured that energy efficiency saves in small measures that over a year’s time give a return on investment.

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Start Simple

Because the process of building is an imperfect process (no matter how detail-oriented your builder is) performed by mutliple contractors who “touch the job” once and then leave, you would be amazed as to how much small spaces and leaks allow air and moisture into your home.  To begin the energy efficiency process, you will want to seal your home as much as possible by caulking and sealing the spaces around your plumbing pipes, electrical systems, light fixtures, and windows as well as the unused portions of your home which can include your attic or crawl space below.  By closing up these areas to air and moisture, you can reduce the amount of air it takes to heat and cool your home.

Work on Major Systems When Possible

HVAC systems are notorious for being big energy suckers, so if you have the money to invest in a completely new system which would include an overhead air conditioning and furnace system (the most energy efficient way to heat and cool your home), you should do so.  If you don’t have the finances for such an expense, having a contractor come out for a service call to inspect your ductwork for blockages or leaks will make sure that your ducts area as efficient as possible.  Clean ductwork allows better airflow which heats and cools a space more quickly.

Small Changes Make a Big Difference

While you are inspecting and focusing in on your HVAC system, you will also want to immediately replace your thermostat if you do not already have an electronic thermostat.  Electronic thermostats can run from $28 – $120 depending on how quality or complicated you would like them to be.  This is a small investment which makes a HUGE difference in your heating and cooling bill.  Buy purchasing a programmable thermostat, you are able to control your home’s temperature when you are home, away at work, or sleeping to keep your heater or air conditioner from “running all day.”

Change Your Ambiance and Save Energy

Another suggestion as a way to reduce the amount of energy used in your home is to replace all of your light bulbs with bulbs that are either CFLs or LED lights.  However, if you are affected by lighting and the ambiance it provides, you could end up spending a lot on the front end to get the desired lighting affect you would like with LED lighting – the closest lighting alternative to old fashioned light bulbs.  If you aren’t picky about lighting, the new CFL light bulbs are energy efficient and last longer than old fashioned bulbs and are becoming more affordable as well.

Adjust Your Temps During Warmer Months

The last energy savings idea to use is to reduce the water temperature on your hot water heater.  “Out of the box,” hot water heaters are programmed to approximately 140 degrees.  If you reduce this to 120 degrees, you can save on heating expenses.  Also, by insulating the pipes on your hot water heater and the pipes going into either the wall or the floor, you can maintain the heated water as well.  While this might be a good idea during warmer spring and summer months, you may want to increase the temperature again during colder weather months because the air temperature feels cooler when you shower or bathe.

By using these energy efficient techniques altogether, you can drastically reduce the amount of money you spend each month on your energy bills.  If you are only able to do a couple or few of the ideas at present, your savings will be less.  However, any money saved is money that can be used for other life necessities in a tough economy.

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Garden Homes Available for 55+ Home Buyers

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The term baby boomer gets tossed around a lot in the United States with the insinuation that their generation has the largest amount of “members,” so everything that happens in the next 30 years as they start to retire will need to be tailor-fit to their needs and lifestyle choices.  The social security system will need to be upgraded, and marketing 1-133-st-calais-place-exterior-front-1efforts will need to be targeted to meet the needs of this large population.  This is also seen in the housing market where housing options for baby boomers will need to be included in any builder’s sales and marketing efforts.  One of the styles of homes that is popular for empty nesters is the garden home.  Garden homes are the luxurious upgrade to the pool house of larger estates.  They sit on less land, have slightly larger square footage than a pool house, and they are typically surrounded by other homes of the same style.  Low-maintenance is the buzz word that is applicable to garden homes because there is little to no yard to maintain or the community provides a landscape or yard service contract which is paid for in the homeowner association dues.

Garden homes are a “move-down” option for baby boomers who are retiring and looking for a smaller footprint because they have no children.  Some garden home communities are built in the style of duplex condos with each 156-st-calais-place-family-room-1garden home sharing a wall but having separate courtyard or yard areas and sometimes their own garage.  In St. Tammany Parish, there are several new home communities which feature garden homes – one of which is Bedico Creek Preserve.  In our Garden / Courtyard Neighborhood, you can find homes for sale as well as lots for sale for you to buy or build a custom garden home that specifically meets your lifestyle requirements.  Many of the builders at Bedico Creek Preserve offer ornate and unique private courtyard customizations with brick pillars and columns and gorgeous peaceful fountains.  Even with less square footage, floorplan arrangements give the illusion of space with open airy rooms, tons of windows and light, and space used efficiently to create architectural designs and spaces to enhance the custom home design beauty.

For 13 consecutive months, builder confidence in the 55+ market has been increasing since the index was established in 2008.  The 4th quarter of 2014 saw the highest increased in builder confidence in this market in 7 years.  Many330-st-calais-courtyard-r baby boomers reached retirement age with savings and retirement accounts intact, and they have been gradually returning to the real estate market because home values have stabilized, and it is now possible to sell an existing larger home to be able to purchase / downgrade to a more affordable and sustainable housing location.  In the Greater New Orleans area, the garden homes available for 55+ home buyers are plentiful as this is a popular and affordable house style that was adopted during and after the Recession. If you are interested in purchasing a garden or courtyard home in St. Tammany Parish or building a garden home on a lot in Madisonville, Louisiana, Contact Bedico Creek Preserve at 985-845-4200 or E-mail Info@LiveBedico.com.

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Real Estate Related Tax Deductions

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While the reasons for buying your own home and officially becoming a homeonwer include ideals such as investment, security, family, and longevity, there are also several financial reasons why buying a new home for sale can also benefit you monetarily.  As tax season approaches, information about real estate related tax deductions should help you when preparing your tax returns and filing your taxes.  Below are just a few of the benefits of homeownership related tax breaks.

1. Deduction of Your Mortgage Interest
This is probably the most well-known benefit of owning your own home.  Instead of paying an almost identical payment in rent for a home of approximately the same size and value and literally “throwing away” your money, with mortgage interest deduction, you can deduct your interest from your gross income to reduce the amount of overall taxes you pay.  Because mortgage interest makes up the bulk of your initial payments to a lender, interest amounts can be substantial for a 12-month period depending on your loan amount.

2. Deduction of Mortgage Insurance Premiums
This is a much lesser known deduction that homeowners sometimes miss when they are filing their taxes.  Many homeowners don’t even know that they are allowed to deduct their private mortgage insurance (PMI) from their taxes.  PMI is charged by a lender when the loan amount is greater than 80% of the home’s appraised value, or loan to value ratio.  Sometimes this is calcualted immediately in an FHA loan situation where the buyer is not putting the tradition 20% down on the purchase of their home.  Other times, it is calculated during a refinance where a homeowner has taken out a home equity line of credit to make improvements or pay off debt.  When the loan’s value reaches 80% of the appraised value of the home, PMI can be removed at the discretion of the lender – it automatically comes off when the value is 78%.  Regardless, this amount of approximately $80 – $150 / month can be deducted from your taxes if you are a homeowner.

3. Deduction of Prepaid Interest
While many people have noticed reductions in their credit scores because of employment issues and debt issues during the Recession, it is still possible as a homeowner to “buy a better interest rate” by using points.  When the appraised value of the home is high, and the loan amount is low, it is possible to spend some money initially during the mortgage process to pay points to achieve a better interest rate.  Points can be paid for ever 1/4% of interest to buy down your rate.  If you have the “breathing room” of excellent equity in your new home purchase, you may consider lowering your monthly payments by purchasing a better rate.  If you are buying a home in the calendar year of which you are doing your taxes, you are able to deduct the entire amount of prepaid interest that is added up in your closing costs.  If you are refinancing, you are able to deduct your prepaid interest over the length of your refinanced loan – not all at once.

4.  Deduction of Property Taxes
Part of the joy of owning your own home is that you are required by St. Tammany Parish to pay property taxes on your home each year.  If the home you are buying is your primary residence, you are able to get a Homestead Exemption which offsets the total value of your home and only charges property tax on the rest of the home’s value.  Either way, as a homeowner of a primary residence or a second home not used as a rental, you are able to deduct the entire amount of your property taxes from your overall tax bill.

5.  Deductions for Energy Improvements
The government still has many energy efficiency tax deductions available for those homeowners who upgrade or renovate their home to make them more energy efficient.  They are called tax credits and typically are applied for new systems that are added to your home, such as solar panels, double-paned windows, and upgraded HVAC / furnace systems.  You can research further to find all of the items that are tax deductible and have government funded tax credits for energy efficiency upgrades.

As you can see, in addition to investing for you or your family’s future by buying a new home in St. Tammany Parish, you can also enjoy the benefit of tax deductions which will increase your refund or reduce the amount of taxes owed.

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