Brian Leavitt, REALTOR®

IRS Provides Relief for Homeowners with Corrosive Drywall

The Internal Revenue Service today issued guidance providing relief to homeowners who have suffered property losses due to the effects of certain imported drywall installed in homes between 2001 and 2009.

Revenue Procedure 2010-36 enables affected taxpayers to treat damages from corrosive drywall as a casualty loss and provides a ”safe harbor” formula for determining the amount of the loss.

In numerous instances, homeowners with certain imported drywall have reported blackening or corrosion of copper electrical wiring and copper components of household appliances, as well as the presence of sulfur gas odors. In November 2009, the Consumer Product Safety Commission (CPSC) reported that an indoor air study of a sample of 51 homes found a strong association between the problem drywall, levels of hydrogen sulfide in those homes and corrosion of metals in those homes.

Revenue Procedure 2010-36 provides the following relief:

• Individuals who pay to repair damage to their personal residences or household appliances resulting from corrosive drywall may treat the amount paid as a casualty loss in the year of payment.
• Taxpayers who have already filed their income tax return for the year of payment generally have three years to file an amended return and claim the deduction. The amount of a loss that may be claimed depends on whether the taxpayer has a pending claim for reimbursement (or intends to pursue reimbursement) of the loss through property insurance, litigation or otherwise.
• In cases where a taxpayer does not have a pending claim for reimbursement, the taxpayer may claim as a loss all unreimbursed amounts paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances resulting from corrosive drywall.
• If a taxpayer does have a pending claim (or intends to pursue reimbursement), a taxpayer may claim a loss for 75 percent of the unreimbursed amount paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances that resulted from corrosive drywall.

A taxpayer who has been fully reimbursed before filing a return for the year the loss was sustained may not claim a loss. A taxpayer who has a pending claim for reimbursement (or intends to pursue reimbursement) may have income or an additional deduction in subsequent taxable years depending on the actual amount of reimbursement received.

For purposes of this revenue procedure, the term “corrosive drywall” means drywall that is identified as problem drywall under the two step identification method published by the CPSC and the Department of Housing and Urban Development in their interim guidance dated January 28, 2010.

Further details and limitations can be found in Revenue Procedure 2010-36 on IRS.gov.

  NWREporter November 2010

“Wise Buyers” Taking Advantage of Chance to Get Stellar Homes

KIRKLAND, WA, October 5, 2010 – Home sales remained subpar around most of Washington during September, but directors from Northwest Multiple Listing Service say they are encouraged by some positive signs.  

“It’s a slow recovery, but it’s trending in the right direction,” said Joe Spencer, president and COO of John L. Scott Real Estate and a member of the NWMLS board of directors.

Among positive indicators the directors cited were pending sales (“starting to show signs of life”), month’s supply of inventory (pointing toward a more balanced market), stabilizing prices (with more homes being priced competitively), the market adjusting to no more tax credits, and strong sales of “specialty homes.”

Northwest MLS members reported 5,741 pending sales during September across the 21 counties in its service area.  That’s a drop from August (down 4.9 percent) and from the same month a year ago (a decline of 24.3 percent), but an improvement on the total number of mutually accepted offers for May, June and July. 

MLS director Pat Grimm, managing broker at Windermere RE/Capitol Hill in Seattle, reports an upsurge in people looking at properties, particularly move-up buyers. He attributes some of that activity to homes “finally being priced competitively.”   The new pool of potential buyers are “getting their feet wet, but they’re taking their time before they jump in,” he commented.

Prospective buyers have plenty of choices across the price spectrum.  MLS members added 9,038 new listings to inventory during September, bringing the total selection to 42,153 active listings.

Spencer, of John L. Scott Real Estate, said he is encouraged by the month’s supply of inventory at the end of September. “The three-county area of King, Snohomish, and Pierce are reporting about six months of inventory, which is a positive indicator based on the last 30 years of market data.” Historically, the MLS director noted, this points to a more balanced market and stabilizing home prices. “That’s not to say we should expect prices to increase right away, but it’s a positive sign nonetheless, especially when you consider that the national supply of inventory is more than 11 months,” Spencer stated.

“There are many very wise buyers taking advantage of what may be a once-in-a-lifetime opportunity,” said Mike Skahen, whose real estate career spans nearly 30 years.  “We haven’t seen a summer like this in home sales since 1982 when interest rates were hovering around 16 percent,” he observed.

Skahen, the owner and designated broker at Lake & Company Real Estate in Seattle and a member of the NWMLS board of directors, said the buyers they’re seeing have good jobs with Google and Amazon. “They realize they have the chance to get stellar homes in great locations at 25 percent off what they were selling for three years ago and at interest rates approaching 4 percent.  I doubt you’ll see a market and selection better than right now,” he commented.

Skahen said his office just had a $600,000 Green Lake mid-century home sell with four competing offers, and his company was one of three brokerages that presented offers on a $770,000 Ravenna listing, but they were outbid.

“Buyers are snapping up homes in all price ranges that are well located, in good condition, and that are priced fairly,” Skahen reported.

NWMLS members reported 3,997 closed sales during September, down from the same month a year ago, when members notched 5,132 completed transactions.  Year-to-date, the volume is up about 9.8 percent from the first nine months of 2009 (40,318 closings through Sept. 2010 versus 36,714 closed sales through Sept. 2009).

Last month’s closed sales of single family homes and condominiums (combined) had a median price of $257,600.  That’s down about 5.6 percent from the year-ago price (area-wide) of $273,000.  Ten of the 21 counties served by NWMLS reported year-over-year price increases.

“The types of homes that are selling particularly well are specialty homes-- homes that have a unique mix of character and amenities.  It can be a waterfront estate or a Craftsman cottage, but there are qualities about the home that really make it stand out. Those homes are one of a kind and they're never bought on price alone,” said OB Jacobi, general manager of Windermere Real Estate Company.     

“Crazy requirements” are impeding the pace of sales, according to NWMLS director Dick Beeson, broker/owner of Windermere Commencement Associates in Tacoma.  “Agents are finding it’s much more difficult to navigate the closing process than ever before.  If it’s not the conditions of an inspection report, it’s the appraisal coming in off sale price or lenders reviewing and re-reviewing the buyer’s qualifications or buyers rethinking whether or not to buy,” he explained.

Looking ahead, Beeson expects the balance of the year to be “somewhat fickle,” in part because of upcoming elections and lingering uncertainty around the slow pace of the recovery.

“Sellers know they must position themselves better than their competition on all levels – price, condition, terms,” Beeson stated, while noting buyers who procrastinate risk losing purchasing power because of anticipated increases in interest rates. 

“Interest rates below 5 percent are an extraordinary event, and buyers need to take advantage of them,” Beeson emphasized.  A 1 percent increase in the interest rate on a $300,000 mortgage increases the monthly payment by $183, he explained, adding experts expect rate hikes. “It’s not if, it’s when,” he contended.

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in Western and Central Washington. 

Statistical Summary by Counties: Market Activity Summary - September 2010

Sept 2010 Single Family Homes + Condos	LISTINGS		PENDING SALES	CLOSED SALES
	New Listings	Total Active	#Pending Sales	# Closings	Average Price	Median Price
King	3789	13,922	2187	1467	$431,968	$349,950
Snohomish	1404	5768	895	615	$296,319	$261,353
Pierce	1355	6108	985	628	$247,080	$220,250
Kitsap	357	1904	283	213	$289,336	$240,000
Mason	115	859	58	53	$215,773	$185,000
Skagit	198	1271	113	87	$237,583	$215,000
GraysHarbor	133	1032	80	52	$152,287	$120,250
Lewis	110	873	65	34	$198,451	$170,450
Cowlitz	125	681	69	62	$170,926	$153,500
Grant	91	674	53	47	$171,691	$165,000
Thurston	432	1932	319	247	$260,034	$233,000
San Juan	30	499	17	13	$520,225	$420,000
Island	138	1081	100	74	$305,948	$254,089
Kittitas	72	577	60	48	$302,325	$233,500
Jefferson	52	613	31	25	$291,275	$240,000
Okanogan	38	452	21	16	$179,589	$171,500
Whatcom	360	2027	256	173	$294,613	$239,900
Clark	46	296	30	42	$246,186	$217,450
Pacific	40	460	38	21	$120,615	$95,000
Ferry	5	57	3	4	$107,500	$115,000
Clallam	67	508	31	35	$231,994	$226,000
Others	81	559	47	41	$226,459	$190,000
MLS TOTAL	9,038	42,153	5,741	3,997	$324,779	$257,600

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2000	3706	4778	5903	5116	5490	5079	4928	5432	4569	4675	4126	3166
2001	4334	5056	5722	5399	5631	5568	5434	5544	4040	4387	4155	3430
2002	4293	4735	5569	5436	6131	5212	5525	6215	5394	5777	4966	4153
2003	4746	5290	6889	6837	7148	7202	7673	7135	6698	6552	4904	4454
2004	4521	6284	8073	7910	7888	8186	7583	7464	6984	6761	6228	5195
2005	5426	6833	8801	8420	8610	8896	8207	8784	7561	7157	6188	4837
2006	5275	6032	8174	7651	8411	8094	7121	7692	6216	6403	5292	4346
2007	4869	6239	7192	6974	7311	6876	6371	5580	4153	4447	3896	2975
2008	3291	4167	4520	4624	4526	4765	4580	4584	4445	3346	2841	2432
2009	3250	3407	4262	5372	5498	5963	5551	5764	5825	5702	3829	3440
2010	4381	5211	6821	7368	4058	4239	4306	4520	4350

__________
Copyright © 2010
ALL RIGHTS RESERVED
This material may not be published, broadcast, rewritten or redistributed without prior permission.

Reprinted with permission of NWMLS

Bye Bye Bank of America Wholesale Lending

 

Bank of America announced today that it plans to exit the wholesale mortgage lending business.  They state that as part of their “customer driven” business model they have decided to focus on opportunities to “deepen our relationships with existing Bank of America customers" and to offer responsible and competitive mortgage products to new customers.  “By responsibly exiting our relatively low market share" (22%) “in the highly diversified wholesale mortgage market.  We can redirect critical operational resources to enhance capabilities for consumers to purchase or refinance homes” 

So let me get this straight, they think that by limiting distribution of their mortgage products they can somehow help consumers?  It seems to me that by limiting access to product they are directly opposing what is in the best interest of consumers. 

We have seen this before.  In Washington Mutual's “glory days", that is the years before the whole mortgage meltdown, we watched Washington Mutual move in and out of wholesale lending time and time again.  Interestingly enough their most profitable years coincided with the years that the majority of the loans they originated were through their wholesale lending relationships.  We certainly wish Bank of America best success in this endeavor, after all it is a free country so why not put the squeeze on consumers if you can.  Brokers, do not worry, they will be back.  In the meantime, Bank of America is not the only game town

This blog was written by Brian Leavitt, Designated Broker of Northstone Real Estate Inc, and Northstone Mortgage.

Brian serves clients within the Northwest Multiple Listing Service. And specializes in residential re sale homes, condo’s and land, and is uniquely qualified as a short sale negotiator holding both real estate and mortgage licenses.

You can contact Brian directly by phone at 800-806-3145 or by email at brian@northstone.net.  Click here to view his client newsletter.

Brian is licensed with the Washington State Department of Licensing and the Washington State Department of Financial Institutions License number MLO-114864 and is a member of the Seattle King County Association of Realtors and Northwest Multiple Listing Service.

Pumpkin Patch Time!

King County

Fall City Farms: 425.222.4553  |  3636 Neal Rd, Fall City

Mosby Brothers Farm: 253.939.7666  |  12754 SE Green Valley Rd, Auburn

Remlinger Farms: 425.333.4135  |  32610 NE 32nd St, Carnation

Serena Farms: 253.261.8789  |  22431 84th Ave S, Kent

Serres Farm: 425.868.3017  |  20306 NE 50th St, Redmond

The South 47 Farm: 425.869.9777  |  15410 124th St, Redmond

Two Brothers Pumpkin Patch: 71103 310th Ave NE, Carnation

 

Snohomish County

Baylor Farm: 360.793.0822  |  28511 Ben Howard Rd, Monroe

Biringer Farm: 425.259.0255  |  Hwy 529 btwn Everett & Marysville

Carleton Farm: 425.334.2297  |  Sunnyside Blvd SE, Everett

Craven Farm: 360.568.2601  |  13817 Short School Rd, Snohomish

Foster’s Pumpkin Farm: 5818 State Route 530 NE, Arlington

Hands-on Pumpkin Farm: 15308 52nd Ave W, Edmonds

 Pierce County

Maris Farm: 253.862.2848  |  24713 Sumner-Buckley Hwy, Buckley

Scholz Farm: 253.848.7604  |  12920 State Route 162 E, Orting

Spooner Farms: 253.840.2059  |  9710 State Route 162 E, Puyallup

Take Root Farm: 253.891.FARM  |  24416 Buckley-Tapps Hwy E, Buckley