Clarification: Tax Relief Still in Effect for Mortgage Forgiveness
An important clarification for any homeowners facing the unfortunate possibility of a short sale or foreclosure: The Mortgage Forgiveness Debt Relief Act of 2007 was in fact extended through December 31st 2012 (before the 2008 elections, it had been due to expire December 31, 2009). Without the bill, when lenders forgave any debt on a property, homeowners were normally taxed on the sum forgiven. This bill provides tax relief to sellers whose mortgage on their primary residence was entirely or partly forgiven by their lender(s), and is limited to loan balances of $2 million or less (or $1 million for a married person filing a separate return). Also, qualifying debt is defined as that used to buy, build, or substantially improve a principal residence, or that used to refinance any qualifying debt (but only up to the amount of the mortgage principal prior to refinancing). More details can be found at http://bit.ly/21xuw3 http://bit.ly/JGuun. Please consult with an accountant for specifics.
Judi Paris, Broker/Sales Associate
Coldwell Banker Realtors- Summit, NJ
(O) 908-522-3631 (C) 973-902-HOME
Visit me at: www.BestHomeResults.com
Visit me on Twitter: @JudiParis
Absorption Rate- What’s That??
Think of a pool of buyers in a specific town as a sponge, and the number of properties available for sale as water. The absorption rate is an indicator that tells how long it will take for the ‘sponge’ to soak up the water, or really, how long it will take Real Estate Buyers to soak up the existing inventory, given the current rate of sales activity in a specific market or town. This is a theoretical number (in months). When the absorption rate is lower than 6 months, it is a Seller’s market (Sellers have the advantage, the market activity is strong, and prices are going up). Market absorption between 6 and 7 months is a neutral market, and when it is 8 or more months, it is a Buyer’s Market (Buyers have the advantage, the market activity is weak, and prices are dropping). Real Estate industry experts track this number over time to follow the trend of the market, to see if it is improving or getting weaker, as well as to read the relative strength of the market at any given time. Market Absorption can be calculated overall for a given town, or can also be narrowed to a nitch market (for example, it can be calculated for only condos or townhomes in a given town, or can be calculated in a specified market value range).
This indicator is calculated by dividing the number of homes on the market for sale in a specific location at a specific time, by the number of homes that went under contract in the 31 days prior. Again, the number calculated is only a theoretical gauge and does not represent how long it really should take to sell of the existing inventory of homes in a given town. When the number is decreasing over time, as in the current market, more homes are coming into the market than are being purchased, which results in driving values down.
Below are the current Absorption Rates of towns that I regularly track. To see the graphs of these rates tracked quarterly over several years, go to http://www.NJHomeTrends.com. If you would like to see a graph of any other towns in Morris, Essex, Union or Somerset Counties of New Jersey, don’t hesitate to email me at Judi@BestHomeResults.com.
Judi Paris, Broker/Sales Associate
Coldwell Banker Realtors- Summit, NJ
(O) 908-522-3631 (C) 973-902-HOME
Visit me at: www.BestHomeResults.com
Visit me on Twitter: @JudiParis
December Absorption Rates
| TOWN | #ACTIVE
LISTINGS |
#SALES | ABSORPTION
RATE |
| Randolph Township | 158 | 19 | 8 |
| Morris Township | 164 | 14 | 12 |
| Morristown | 119 | 12 | 10 |
| Madison Borough | 71 | 12 | 6 |
| Chatham Borough | 31 | 4 | 8 |
| Chatham Township | 86 | 9 | 10 |
| Summit City | 143 | 16 | 9 |
| Millburn Township | 112 | 14 | 8 |
