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Local Address: February 22, 2009 - February 28, 2009

Homeowners, Renters and Taxes

There's a lot more to being a landlord than cashing a rent check. Renae Merle's report in the Real Estate section this weekend lays out some of the tax breaks that can make the investment work. Deductions available to landlords include mortgage interest, property taxes, insurance and depreciation--an on-paper-only expense that reflects the diminishing value of a building as it deteriorates over time. And actively involved landlords who don't farm all the work out to someone else can deduct as much as $25,000 of losses against their non-rental income. Homeowners, of course, have their own well-known tax breaks. Mortgage interest and property taxes are deductible. And, after selling their main home, married couples can reap as much as $500,000 in capital gain without owing a penny in tax. (The limit is $250,000 for singles.) Is the system stacked too much in favor of homeowners? Landlords? Do renters get a...

By Elizabeth Razzi  |  February 27, 2009; 2:09 PM ET  |  Permalink  |  Comments (1)
Categories:  Taxes  
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Is Your Mortgage Deduction Under Fire?

Do you hear the rumble of heavy weaponry? It's not the military's latest training exercise over Washington, but the big housing-industry lobbyists fixing for war. They say nothing less is at stake than the mortgage interest deduction. Next to fall will be motherhood and apple pie. Here's what sent them to the battlements: The Obama administration's budget proposal would limit the ability of upper-income folks to deduct home mortgage interest from taxable income. For couples earning more than $250,000, or $200,000 for singles, the budget would reinstate the limitation on claiming itemized deductions, including the one for mortgage interest. Note the word reinstate. This limit is not a new thing; upper-income folks have seen part of their itemized deductions wiped away for years. So what's really going on here? I asked Mark Luscombe, principal tax analyst for CCH, whether this would be a new hit on homeowners -- or just...

By Elizabeth Razzi  |  February 27, 2009; 6:00 AM ET  |  Permalink  |  Comments (10)
Categories:  Taxes  
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Get Your $8,000 Now!

If you bought a home this year -- and you qualify for the new, $8,000 first-time-buyer tax credit -- you can get the money faster by claiming the credit on your federal income tax return for 2008, which you're supposed to file by April 15. The Internal Revenue Service has published extra information on its Web site, www.IRS.gov, explaining how to claim the credit. It says if you buy a home before Dec. 1, 2009, you can claim the credit on either your 2008 or 2009 return. If you plan to buy a home later this year, it could be worth your while to file for an extension on your 2008 tax return so you can claim the credit without waiting for next year's tax season. Another way to approach it would be to file an amended return after you close the deal. The IRS restated that the $8,000 tax...

By Elizabeth Razzi  |  February 26, 2009; 6:00 AM ET  |  Permalink  |  Comments (0)
Categories:  Taxes  
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How's That? Home Sales, Prices, Inventory All Drop

The National Association of Realtors is out this morning with its home-sales report for January. And it shows a surprising mix: The number of existing-home sales, of all types, fell 5.3 percent from December to January. (That number is adjusted to account for seasonal variations; it's down 8.6 percent compared with a year earlier.) The median price fell 3.07 percent in January to $170,300. (That's an annual decrease of 14.8 percent.) What's odd is that total inventory of homes available for sale also fell 2.7 percent. If both sales and inventory are down, that means fewer homes were put on the market in January than in December. Usually the supply of homes for sale starts to drift up in January as sellers anticipate the busier spring market. Lawrence Yun, chief economist for the Realtors, said the decline in new listings could in part be because of moratoriums on foreclosures that...

By Elizabeth Razzi  |  February 25, 2009; 10:32 AM ET  |  Permalink  |  Comments (3)
Categories:  Statistics , The market  
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Will Housing Market Spring Forward?

Okay, the Super Bowl is well past and daylight savings time is less than two weeks away. Both are harbingers of spring -- and the fabled "spring selling season" for real estate. Will we have one this year? Is anyone seeing signs of more buyer activity yet? Are sellers (especially the not-desperate ones) thinking about giving it a try? We'll get another blood-pressure reading on the state of the national market this morning, when the National Association of Realtors releases its sales -- and price -- figures for January. And a week stuffed full of housing data will conclude on Thursday with stats on new-home sales. These numbers all lag what's happening in the market today. That's simply the nature of statistics; they're always a rear-view mirror thing. What are you seeing out the windshield? Any signs of spring out there?...

By Elizabeth Razzi  |  February 25, 2009; 6:00 AM ET  |  Permalink  |  Comments (2)
Categories:  The market  
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Jumbo Loans Get Supersized -- Again

It's official: The dividing line for jumbo mortgages in the Washington region (and other high-cost areas around the country) is now $729,750. Below that, Fannie Mae and Freddie Mac can buy a loan. From there on up, it’s a jumbo, and costs more. An announcement by the Federal Housing Finance Agency makes it clear that the new “conforming loan limits,” which govern the size of mortgages that can be purchased by Fannie and Freddie, have been returned to that higher dollar amount, which was in effect last year. The change back is thanks to the economic stimulus package recently signed into law. That’s important to home buyers and refinancers because jumbo mortgages carry higher interest rates. This bouncing around of the jumbo-loan threshold is unprecedented. Through much of last year, the cutoff point was $729,750, but the government reduced the number to $625,500 as of January 1. The once-again...

By Elizabeth Razzi  |  February 24, 2009; 1:00 PM ET  |  Permalink  |  Comments (0)
Categories:  Mortgages  
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Another shot of dueling data

The second important set of housing statistics released this morning also shows that home prices in the Washington area declined less steeply at the end of last year than they had been doing. According to the Federal Housing Finance Agency, home prices in the Washington region fell 1.27 percent in the October-December quarter, compared with the 4.74 percent decline logged between July and September. For the year, Washington-area prices fell 12.15 percent, a very slight improvement over the 12.52 percent annual decline that FHFA reported in late November. Those gains aren’t as steep as those shown in the S&P/Case-Shiller report released just an hour earlier. That’s no surprise: Throughout this downturn, the Case-Shiller stats have looked much worse than the government’s numbers. That’s partly because Case-Shiller includes higher-priced homes that don’t qualify for Fannie Mae or Freddie Mac loans, as well as loans for borrowers with riskier credit. Nationally, home...

By Maryann Haggerty  |  February 24, 2009; 11:17 AM ET  |  Permalink  |  Comments (0)
Categories:  Statistics  
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Washington among the few areas where price drops slowed

Standard & Poors/Case-Shiller numbers out this morning show a Washington-area home-price picture that is slightly less bad than it was last month. Prices declined 2.2 percent from November to December, a smidgen better than the 2.5 percent price decline reported the previous month. For the year, Washington prices fell 19.2 percent, very slightly improved over the 19.4 percent annual price decline reported a month ago. The Washington metro area is among just a handful of areas (the others are Boston, Denver, Los Angeles and San Diego) that reported any improvement in the rate of price decline. Nationally, Case-Shiller reports that average prices in the fourth quarter were 18.2 percent lower than a year earlier, the largest decline in the 21 year-history of the index. Prices are back to levels last seen in the third quarter of 2003, and are down 26.7 percent from their peak in the second quarter of...

By Maryann Haggerty  |  February 24, 2009; 10:12 AM ET  |  Permalink  |  Comments (0)
Categories:  Statistics  
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Lots of economic reports important to housing coming today

A heavy load of economic statistics that affect housing markets is due out Tuesday morning, part of a week heavy on housing stats. The Standard & Poor’s/Case-Shiller Home Price Index for December comes out at 9 a.m. This has been a steady bearer of bad news, last month reporting that prices in the Washington metro area fell 2.4 percent from October to November, and 19.4 percent for the year. Then the Federal Housing Finance Agency will release its house price index for the fourth quarter at 10 a.m. The agency’s previous report, issued in late November and covering the July-September quarter, showed that single-family sales prices had fallen 1.8 percent from the second quarter, the largest decrease in the 17-year history of the index. The agency also reported that prices fell 6 percent in the third quarter compared with a year earlier. The Conference Board also will report on...

By Elizabeth Razzi  |  February 24, 2009; 6:00 AM ET  |  Permalink  |  Comments (3)
Categories:  Statistics  
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Local Address, The Blog

Welcome to Local Address. Our hope is that this blog becomes the top spot for talking about everything related to owning a home. We're defining the homeownership topic broadly, including the financial aspects and how the latest versions of federal bailouts affect your wallet. And we want to hear your thoughts on these issues. How is the housing market changing your household's plans? Are you renovating less? Waiting to sell? Being tempted back into the market by low prices? We don't intend to forget the workaday issues that used to be top concerns, back before the word housing became linked with "crisis." Homeowners association living, remodeling trends, buying and selling strategies -- this blog will be a place to share information about all these topics. You, the readers, will be will be critical in helping to shape this blog. Nothing beats the collective wisdom of buyers and sellers reporting from...

By Elizabeth Razzi  |  February 23, 2009; 12:30 AM ET  |  Permalink  |  Comments (3)
 
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