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Jessica Gaines Jarboe's Blog

By Jessica Gaines Jarboe | Broker in Louisville, KY

Will The Fiscal Cliff Deal Keep Louisville Buyers In The Real Estate Deep Freeze?

After flirting with cold and snow as 2013 started in Louisville, we expect to see 60° temperatures by the end of next week. This bodes well for real estate, as buyers are more motivated to see listings and think seriously about buying when the weather is better. In view of recent deals about the fiscal cliff, were there implications for real estate that might keep us in the real estate deep-freeze?

Low Mortgage Rates

Mortgage rates in the Louisville real estate remain attractive. If you have a FICO score of 740 or more and put down 20%, you might be able to find rate is low as 3.03% for a 15 year fixed, 3.60% for a 30 year fixed, or 3.19% for a 5/1 ARM mortgage. Considering that over the last month, the average selling price of a home in Louisville was $168,182, with the median price of $136,500 this loan rates mentioned give you a good idea of what you might get in the mortgage market. There is nothing in the fiscal cliff deal that directly impacted mortgage rates.

Real Estate Provisions In The Fiscal Cliff Deal

Mortgage insurance premium options remained intact for 2013 for filers making under $110,000. The deduction was made retroactive for 2012. Even if future budget compromises impact the mortgage deduction, you are safe now: there's always the chance that even if deductions were eliminated, it may only impact wealthier taxpayers.

Buy a home that needs to be more energy efficient? The energy 10% tax credit (up to $500) for homeowners extends to 2013 and is retroactive to 2012 for new and existing homeowners, so you will be able to receive tax benefits for energy updates.

The value of Itemized deductions remains intact for filers earning less than $250,000 ($300,000 for joint filers.) Previously, limitations imposed by the Pease amendment would have ended for everyone, but now many people have an extension.

For homeowners who have suffered through foreclosure or short sale, the fiscal cliff deal extends the Mortgage Forgiveness Debt Relief Act for another year. Many homeowners faced with being taxed on the difference between the loan amount and the and faced "being taxed on money they've already lost with cash they never received," as the NAR puts it. By not having to pay taxes on this money, former distressed homeowners are able to move on with their lives more quickly.

Future changes to capital gains taxes may come about in future tax reforms, the Cisco quits you keeps the rates at 15% for individuals making under $400,000 a year ($450,000 for couples) and sets it at 20% for incomes above those thresholds. When selling your house, the 250,000/$500,000 exclusion for the Prince will residence remains.

Protect Yourself For The Future

Recent tax provisions may only be a temporary fix that do not address long-standing economic problems in our country, but there is no crystal ball in real estate. For anybody buying real estate now, the reasonable prices and low mortgage rates coupled with current tax provisions, make buying advantageous, regardless of what might happen in the future.

The key as always is to work with an honest, competent Realtor® who can help you buy an affordable house in or below your budget who can help protect your from your own fiscal cliff. I'm Jessica Gaines from Louisville Gaines Real Estate. Call me today to take advantage of the nice weather and get a head start to finding your dream home.


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