Pending Home Sales Make Largest Jump Since June 2020 as Mortgage Rates Fall
Pending Home Sales Make Largest Jump Since June 2020 as Mortgage Rates Fall In December, U.S. pending home sales experienced a notable surge, rising by 8.3% from the previous month, as disclosed by the National Association of Realtors (NAR) in its monthly index report released on Friday. These pending home sales represent transactions where contracts have been signed for the sale of existing homes, though the sales have not yet closed. This substantial month-to-month increase is the most significant since June 2020 when the metric rose by 14.9%, surpassing the expectations of Wall Street economists who had anticipated a mere 2% rise. Year-over-year transactions also demonstrated a positive trend, showing an increase of 1.3%. "The Housing Market is Off to a Good Start This Year" - NAR The NAR unveiled an updated forecast for existing-home sales in 2024, projecting a substantial 13% rise from the previous year, reaching a pace of 4.62 million. The association anticipates that the U.S. Federal Reserve will implement four interest rate cuts in 2024, and the 30-year mortgage rates are expected to fluctuate in the 6% to 7% range for the majority of the year. Earlier reports on increased contract signings and mortgage applications in the week suggested a pent-up demand from buyers attracted by declining mortgage rates. However, the recovery of the housing market continues to be impeded by a limited housing supply. The report underscores the importance of addressing the "lock-in effect" and encouraging more homeowners to put their properties on the market to facilitate a significant increase in sales. Lawrence Yun, the chief economist at NAR, acknowledged the positive start to the year in the housing market, attributing it to falling mortgage rates and stable home prices. He emphasized that while job additions and income growth contribute to housing affordability, a crucial element for satisfying potential demand lies in boosting housing supply. How the Markets Responded Market reactions to this news were evident in early trading on Friday, with stock indices DJIA and SPX registering gains. Concurrently, the yield on the 10-year Treasury note, represented by BX:TMUBMUSD10Y, rose above 4.1%, indicating investor response to the dynamic conditions in the housing and financial markets. Source: MarketWatch
Dallas-Area Homestead Exemptions Explained
HOW TO SAVE ON PROPERTY TAXES IN TEXAS WITH A HOMESTEAD EXEMPTION If you are a homeowner in Texas, you may be able to save on your property taxes by taking advantage of homestead exemptions. These exemptions can help to reduce the amount of property taxes you owe and provide much-needed relief. In this blog post, we will discuss how homestead exemptions work in Texas and how they can help you save on property taxes. Overview of Homestead Exemptions in Texas Property taxes are a major source of revenue for the state of Texas, as there is no state income tax. To help offset this burden, the state offers homeowners a homestead exemption that can significantly reduce their taxable value. Homeowners can apply for a homestead exemption and receive a tax break on their residential property taxes. Additionally, Texas offers other exemptions for military veterans, disabled persons, and homeowners over the age of 65. For example, Dallas, Texas offers a full homestead exemption to the over-65 population, allowing them to eliminate all property taxes from their bill. How Does the Homestead Exemption Work? In 2023, the Texas Legislature passed an $18 billion tax relief program. In Dallas and throughout Texas, the new homestead exemption allows homeowners to reduce the taxable value of their property by up to $100,000, up from the previous $40,000. This means that if your home's value is $150,000, only $50,000 of that would be subject to taxation. Additionally, the state offers special exemptions for veterans, disabled persons, and those over 65 years of age. Veterans in Dallas may be eligible for an additional 10% off their total homestead value, up to $5,000. Disabled persons may qualify for an additional $5,000 exemption on their property taxes, and those over 65 are eligible for an additional $10,000 exemption. Who Qualifies for a Homestead Exemption? To qualify for a homestead exemption in Texas, an individual must own the residence that they occupy as their primary residence. This residence can be a separate structure, condominium, or manufactured home located on either owned or leased land. The residence must be used solely for residential purposes and cannot exceed 20 acres. Additionally, the owner of the residence must have occupied it before January 1st to receive the exemption for the applicable portion of that tax year. Furthermore, the homestead exemption cannot be claimed on any other property by the same owner. How to Apply for a Homestead Exemption Applying for homestead exemptions in Texas is quite simple, assuming you meet the basic eligibility requirements mentioned above. The process can vary slightly from one county to the next, but in general, it works like this: Visit the tax appraisal website for your county to find any specific instructions. Dallas County Homestead Exemptions Rockwall County Homestead Exemptions Collin County Homestead Exemptions Tarrant County Homestead Exemptions Johnson County Homestead Exemptions Denton County Homestead Exemptions Ellis County Homestead Exemptions Kaufman County Homestead Exemptions Obtain a copy of the “Application of Residential Homestead Exemption” from your local appraisal district. Complete the application with the required information about yourself and the property you’re claiming as a primary residence. Submit the form in accordance with instructions provided by your appraisal district. Provide any additional items your district might require (e.g., copy of driver’s license). Follow up with your local appraisal district if you don’t receive any confirmation. Do I Have to Apply Each Year? Great question! If you had a homestead exemption on your home last year, you won't need to reapply unless your chief appraiser requires it. However, if you haven't received an exemption on your present home, or if you've moved, you'll need to file for the exemption. As of 2022, you can do this immediately after purchasing a new home instead of waiting until the following January 1st. If you are age 65 this year, you may file for the age 65 or older exemption up to one year after the date you because age 65. And if you are disabled, you may file for the disabled person's exemption. Homestead exemptions can be a confusing topic. If you have additional questions about this subject, check out the “property tax exemptions” section of the Texas Comptroller’s office. Still unsure about Homestead Exemptions? Give us a call to learn more! 512-640-1881
IS BUYING A CONDO A GOOD INVESTMENT?
Is Buying a Condo a Good Investment? The pros and cons of purchasing a condo in Austin Condominium living is growing in popularity due to its relative affordability and relaxed lifestyle it offers. Condo living eliminates much of the exterior maintenance and heavy yard work. And, since most condos are in metropolitan areas, residents enjoy easy access to entertainment, shopping, bars, and eateries. The American dream of owning a home is alive and well, as nearly 66% of Americans owned a home in 2022. In the same year, 27% of residents lived in a condo or homeowners association (HOA) property. With over 351,000 HOAs in the U.S., as recently as 2019, these communities accounted for nearly 75% of home sales. The monthly HOA fees condo owners pay adds up to over $280 billion annually for the national economy. Still, the question remains, "Is buying a condo a good investment?" Reviewing the condo market in Austin Throughout Texas, citizens and businesses generally accept the term "homeowners association" or HOA. However, Texas law uses the term "property owners association" to define associations with members consisting of condominium owners and a governing board of directors. What’s more, property owner associations may fall under an incorporated or unincorporated category. It’s also important to note that most property owners’ associations are usually formed as nonprofit corporations. Expenses for maintaining a condo Typically, a condominium will cost less than a single-family home in the same geographic area and with similar square footage. However, before purchasing a condo, it's essential to understand the costs beyond the mortgage payment. Understanding that laws and rules differ substantially between states and HOA organizations is vital. HOA fees HOA fees typically cover utilities, exterior maintenance, landscaping, and community amenities. A board made up of residents determines the fee for each condo. Most monthly fees range from about $100 to $1,000. Square footage, location, and the extravagance of the amenities determine the HOA fee. Costs tend to rise yearly, and if significant expenses such as an elevator or furnace need replacing, the HOA fee may increase more than usual. Special assessment fees Some HOAs will charge their residents a one-time fee for emergency expenses, such as a new roof or a parking lot that needs repaving. This special assessment fee is in addition to the regular monthly fee. Condo insurance The condo insurance rate covers possessions, interior walls, and damage caused by theft, fire, and vandalism. Often, the monthly HOA fee includes the condo insurance. Many HOAs also require residents to carry personal liability insurance for injuries that may occur in their homes. What you should know before buying a condo When deciding if buying a condo is a good investment, buyers should know that obtaining an HOA mortgage may present more challenges than financing a single-family home. You will typically pay a slightly higher interest rate to get a mortgage for a condominium. Additionally, the buyer and HOA must qualify for the mortgage. When purchasing a condo, whether for investment purposes or to use as a residence, it's essential to keep the following considerations in mind: Amenities: Consider what types of perks you need for your lifestyle. If a fitness center and pool make it possible to cancel your gym membership, it may more than makeup for the higher HOA fee. Other popular amenities include community and game rooms, tennis courts, and pet spa facilities. Location: It's ideal to buy a condo in an established neighborhood. But keep an eye out for developing areas as well. Focus on the area's current and potential attractions and amenities complementing your lifestyle. Walkability: The ability to walk to a grocery store, restaurant, and services such as medical clinics, banks, and libraries represents a highly sought-after feature when buying or renting a residence. Not only does it promote a healthy lifestyle, but it also minimizes wear and tear on your vehicle. Maintenance reviews: Review sites for larger condo buildings to see what the residents say about the management and maintenance staff. HOA fees and building conditions: Review the HOA fees to see what they cover. For example, if you're purchasing a condo in a state with frigid winters, does the HOA fee include heat? For older buildings, look at how recently they completed renovations. How up-to-date is the HVAC system? When did they last replace the roof? Purchasing a condo as an investment Real estate investors often lean toward purchasing condos because of the typically lower cost, and the HOA fees simplify maintenance and other considerations, such as insurance. Adversely, the HOA board establishes the fees and rules of the HOA. In some cases, the condo owners get to vote on nonessential improvements. Investors purchasing multiple units may want to consider running for the board to gain more participation in the decision-making process. When considering a condo as an investment, you need to look at the direction of your investment: Do you plan to live in the condo and sell it for profit? You will want to time the sale according to the market and appreciation of the condo. Does your investment plan involve renting the condo out long-term? Or do you plan to use management companies such as Airbnb or VRBO to rent it out short term? Are you purchasing the condo as a vacation spot, possibly to use it as a future retirement home? You may want to rent it out short-term when you're not using it. Whatever your investment intentions entail, it's vital to thoroughly research the HOA rules and guidelines to ensure you're within the criteria and review the procedures you'll need to follow to rent the condo, either long or short-term. Preparing your condo for sale When you decide to sell your condo, make sure to follow the steps below: Review the HOA rules and guidelines. Hire a real estate agent with experience in condominium sales. A professional agent will research the local market and review the properties that have recently been sold in your neighborhood. They will also advise you on the best time to sell your condo. Staging your home may significantly increase your profits. Make sure all the rooms demonstrate a defined and useful purpose. Remove clutter and personal items such as photographs. Focus on marketing that highlights the building amenities and local attractions. For many homebuyers, condos provide an ideal lifestyle with low maintenance, convenience, and affordability. They also represent an excellent opportunity for those who invest wisely and understand the condo market, making buying a condo a good investment. We can help If you live or plan to relocate to Austin, Texas, and wondering if buying a condo is a good investment, reach out to Prospect Real Estate today.
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