Show All » 2010 » February
Saturday, February 13, 2010Anoka MN Homes for Sale
The city of Anoka, Minnesota has had a significant increase in the quality and profitability of it’s housing market, along with an increase in affordable housing, in the month of January 2010 as compared to January 2009. This may generally be seen as evidence towards a growing trend of “bottoming out” in the housing market as the credit collapse comes to a close and the surplus quantity of homes on the market begins to meet demand. It should be noted that, while nowhere near the sky-high levels of a few years ago, Anoka houses are now closing in less time, for less money, in higher levels of frequency.The first and most telling number is that new listings in Anoka decreased 34.6% as compared to the same month last year, which indicates that there is less of a glut of houses entering the market, giving the market more of an opportunity to bleed of existing supply. This is also reflected in the fact that the average number of days between when a house is first listed and when it sells has decreased from an agonizingly high 131 days to a much more reasonable 69 days, a drop of over 47%. This indicates that the housing market has largely stepped out of it’s free fall, and while 69 days is still a historically long time for a house to remain on the market, it is much closer to expected norms than 131.
The most hopeful number, however, is that the percentage of closed sales has increased 80% when compared to January of 2009. This indicates that more houses are ending with sale of the property as opposed to the property being abandoned or falling into bank ownership. However, this may be due to the fact that housing prices have dropped almost 25% within the past year. While certainly good to first-time home buyers and new homeowners, this means that property values are dropping and that many persons who sought to make their home an investment are receiving much less from the sale than they had hoped. However, since on average a seller receives 92.1% of the asking price, it appears that most persons who are selling their home at least receive most of what they expect to get for the sale. This seems to indicate that prices have now met market demand and may in fact be helping to spur sales.
Posted By: Ryan O'Neill @ 1:07:16 PM Top
Show All » 2010 » January
Saturday, January 30, 2010Help With Foreclosure Confusion - Minnesota
Late this week Minnesota Public Radio ran a story about how national research firm RealtyTrac's foreclosure information in the Twin Cities was being disputed by Minnesota housing experts. In the story, foreclosure numbers published by RealtyTrac in the Twin Cities for 2009 were double the amount of actual foreclosures.
In an attempt to determine if the story has any validity, today we're examining a very specific segment of the market: Hennepin county. Hennepin is the most populous county in Minnesota with an estimated 1 out of every 5 Minnesotans residing inside the county.
According to RealtyTrac, during 2009 in Hennepin County there were 9,778 foreclosures. Cross-referencing the figure above with HousingLink, a nonprofit Minneapolis-based organization that claimed RealtyTrac's numbers were too high, led to incomplete information which led to more digging.
HousingLink only has foreclosure numbers for Hennepin county up to the third quarter. The foreclosure figure for Hennepin county in quarters one and two was 2,722. In quarter three the number of foreclosures was 1,447. The combined number of foreclosures for quarters one through three was 4,169.
Looking for another figure, we searched the Hennepin County Sheriff's Office for the number of foreclosures in 2009. The total number of foreclosures according to the Sheriff's office was 4,852. The total number of foreclosures for Hennepin county is likely to be slightly higher than the Sheriff's offices' figures simply because they were only reporting on foreclosures up 'til December 4, 2009.
Of the three figures examined, HousingLink and the Sheriff's office seem the most reliable.
There are a lot of different housing figures constantly being generated and it's not always easy it determine which numbers are correct. If you've got questions, the first person you should talk to is a Realtor you trust. Not sure whom you can talk to? Consider attending a free mn first time homebuyer class where you can have your questions answered by a professional that's working in the field. These classes are great opportunities to meet a number of different real estate agents to begin building a professional relationship.
If you are a first-time investor and have considered purchasing a foreclosed property to start generating income, your head may be spinning because of all the numbers and figures in this post! Fear not! If you're looking to purchase a foreclosure as a minnesota investment property, you're going to need an experienced Realtor that knows all of the intricacies of foreclosed properties.
If you're looking to buy, remember you've only got until April until the homebuyer credit runs out!
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Show All » 2010 » January
Sunday, January 24, 2010St. Paul Real Estate Market Update
The city of St. Paul is Minnesota's second most populated city in the state and is home to many attractions. While we anxiously wait to see how buyers and sellers started 2010, today in honor of St. Paul's Winter Carnival celebration we're reflecting on the housing market in Minnesota's capital city.
The number of single-family homes in December 2008 was 1,622 homes on market, 399 being new listings. December 2009 saw the total number of homes on the market drop 29.2% to 1,148. Likewise the townhouse and condo inventories saw an 18.9% decrease between December 2008's 429 units and December 2009's 348 units. New market listings in December '09 were down 19% to 323 over the previous year. This change for new market listings follows the year-to-date trend: 6,859 in 2008 down 8.6% in 2009 to 6,268.
Closed sales for December 2009 slipped slightly while closings year-to-date saw an increase. In December '08 and year-end of 2008, the numbers of closed sales were 228 and 3,059 respectively. Closed sales for December '09 slipped 7.9% to 210 with the year-to-date at 3,893 closings, a 27.3% increase over the previous year.
The average sales price for December 2008 to December 2009 decreased from $138,084 to $136,126 in 2009. The average sales price for the year-to-date decreased 16.5% from $170,040 to $142,013 in 2008 and 2009 respectively. However, the percent of sellers receiving the original list price increased 7.7% from December 2008's 88.4% to 95.1% in December '09. For the year-to-date in 2009, 92.8% percent of sellers in St. Paul received the original listing price (not accounting for previous listing prices), which increased slightly by 3.3%.
The average number of days a home sat on the market decreased by 23.5% from 142 days in December 2008 to 108 days in December 2009. The year-to-date average also fell by 10.5% from 141 days to 126 days.
With St. Paul's many charming neighborhoods, schools, universities, and cultural amenities, this city is guaranteed to feel like home. You may need help finding the right location, which is what the MN Real Estate Team excels at! First time homebuyers often have many questions and aren’t sure where to find the answers, but the Minnesota Real Estate Team help answer any question in a casual setting with their various seminars. In addition, as you search for properties, you can have an actual realtor search the mn mls for you. Only a licensed realtor can access the MLS but you can certainly search for properties at our team's websites.
Posted By: Ryan O'Neill @ 6:22:56 PMTop
Show All » 2010 » January
Tuesday, January 19, 2010New Home Buyer Credit
New Homebuyer Credit Form 5405 Released
The IRS released the updated Form 5405 that is to be used to claim the First Time Homebuyer Credit under the revised rules. The IRS is expected to begin processing these forms in mid-February. Qualifying homebuyers can now start to file their 2009 tax returns.
Note: No EFiling allowed. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements.
When will I get my refund? For those taxpayers that are able to file early may see tax refunds take an additional two to three weeks.
In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement
- For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner's name, property address and date of the certificate.
For taxpayers claiming the $6,500 credit (homeowners who have lived in their home 5 consecutive years out of the past 8 years) must also show documentation. The IRS encourages homebuyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:
- Form 1098, Mortgage Interest Statement,
- Property tax records, or
- Homeowner's insurance records.
In general, it takes about four to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. For those homebuyers filing early, the IRS expects the first refunds based on the homebuyer credit will be issued toward the end of March. By having your refund directly deposited will help speed up this process.
For additional resources taxpayers can go to the IRS website at www.IRS.gov. Here they can look at FAQs on the Homebuyer Credit and also check the status on their refund claim by clicking under “Where’s My Refund?”
Circular 230 Notice: IRS regulations require us to advise you that, unless otherwise specifically noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) was not intended or written to be used, by any taxpayer for the purpose of avoiding tax-related penalties imposed under the U.S. Internal Revenue Code or any other applicable state or local tax law provision; furthermore, this communication was not intended or written to support the promoting, marketing or recommending of any of the transactions or matters it addresses.
Greg Nelson, CPA, MBT
Principal
Olsen Thielen CPAs & Consultants
952.941.9242
Posted By: Ryan O'Neill @ 1:19:30 PMTop
Show All » 2010 » January
Thursday, January 07, 2010Passive Activity Loss
Revenue Notice 2010-13
Passive Activity Loss (PAL) groupings/regroupings must be reported to IRS
Effective for tax years beginning on or after Jan. 25, 2010
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Who does this affect? In general…..
-Taxpayers with many trades/ businesses that want to act as one economic unit;
-Trades/businesses that want to combine rental activities as one economic unit
-These new rules don't apply to the rental real estate activities of persons or entities who have made the election relating to real estate professionals.
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A new notice requires taxpayers to report to IRS their groupings and regroupings of activities and the addition of specific activities within their existing groupings of activities for purposes of the passive activity loss (PAL) rules. The new rules are effective for tax years beginning on or after Jan. 25, 2010.
Background. Deductions from passive trade or business activities, to the extent they exceed income from all such passive activities (exclusive of portfolio income), may not offset other income.
Disallowed losses and credits are treated as deductions and credits allocable to the activity in the next tax year (i.e. carried over)
Sometimes it is beneficial for taxpayers to group their passive activities together in order to materially participate and deduct the losses currently.
The PAL rules under IRS Code 469 are very complex and intertwined.
In general, once a taxpayer has grouped its activities, it can't regroup them in subsequent tax years. However, if IRS determines that a taxpayer's original grouping was clearly inappropriate, or if a material change in the facts and circumstances has occurred that makes the original grouping clearly inappropriate, the taxpayer must regroup the activities and must comply with the disclosure requirements that IRS may prescribe.
The new rules require a statement with specific information to be filed with respect to these events:
New groupings- A taxpayer must file a written statement with his original return for the first tax year in which two or more trade or business activities or rental activities are originally grouped as a single activity or as separate activities.
Addition of new activities to existing groupings- Whenever a taxpayer adds a new trade or business activity or a rental activity to an existing grouping within a tax year, he must file a written statement with his original return for the tax year in which the new trade or business activity or rental activity is added to the existing grouping. Besides other required information, the statement must contain a declaration that the activities constitute an appropriate economic unit for the measurement of gain or loss.
Regrouping- If it is determined that the taxpayer's original grouping was clearly inappropriate or a material change in the facts and circumstances has occurred that makes the original grouping clearly inappropriate, the taxpayer must regroup the activities and file a written statement with his original return for the tax year in which the regrouping occurs. For activities regrouped into a single activity, the statement must in addition to other required information contain: (1) a declaration that the regrouped activities constitute an appropriate economic unit for the measurement of gain or loss; and (2) an explanation of why the taxpayer's original grouping was determined to be clearly inappropriate or the nature of the material change in the facts and circumstances that makes the original grouping clearly inappropriate.
Where no reporting is required- Reporting isn't required for:
Partnerships and S corporations, which must instead comply with the disclosure instructions for grouping activities provided for on Form 1065, U.S. Return of Partnership Income and Form 1120S, U.S. Income Tax Return for an S Corporation, respectively. Generally, compliance with the applicable form requires disclosing the entity's groupings to the partner or shareholder by separately stating the amounts of income and loss for each grouping conducted by the entity on attachments to the entity's annual Schedule K-1.
Preexisting groupings, namely groupings of trade or business activities and rental activities that were made before Jan. 25, 2010 (but reporting will be required if the taxpayer makes a change to the grouping).
Failure to report- In general, if a taxpayer fails to report a grouping, then each trade or business activity or rental activity is treated as having been grouped as a separate activity for purposes of applying the passive activity loss and credit limitation rules. However, a timely disclosure is deemed to have been made by a taxpayer who has filed all affected income tax returns consistent with the claimed grouping of activities and makes the required disclosure on the income tax return for the year in which the failure to disclose is first discovered by the taxpayer. If the failure to disclose is first discovered by IRS, however, the taxpayer must also have reasonable cause for not making the required disclosures.
Circular 230 Notice: IRS regulations require us to advise you that, unless otherwise specifically noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) was not intended or written to be used, by any taxpayer for the purpose of avoiding tax-related penalties imposed under the U.S. Internal Revenue Code or any other applicable state or local tax law provision; furthermore, this communication was not intended or written to support the promoting, marketing or recommending of any of the transactions or matters it addresses.
Greg Nelson, CPA, MBT
Principal
Olsen Thielen CPAs & Consultants
952.941.9242
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Show All » 2010 » January
Wednesday, January 06, 2010Twin Cities Foreclosure Stats
As the local and national economy continues to recover, foreclosure rates are speculated to rise in 2010. Disappearing labor markets responsible for high unemployment rates and adjustable-rate-mortgages (ARMs) resetting higher may ultimately contribute to the increase in foreclosures. Today we’ll compare foreclosure numbers in the Twin Cities during November 2008 and November 2009.
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