By Karen Larson
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Welcome to the first monthly Real Estate column of 2013 brought to you from The El Dorado County Association of Realtors (edcar.org) and focusing on local real estate information and issues.
The American Taxpayers Relief Act of 2012 was signed into law on Jan. 2, much to the relief of Realtors currently trying to help homeowners short sale their properties. The law includes a provision to extend the Mortgage Forgiveness Debt Relief Act, which will for one more year exempt the taxation of mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale or loan modification (including any principal reduction). However, the California exempt expired at the end of 2012, so forgiven mortgage debt is considered taxable state income for now.
This could impact short sales in California, and that’s why the California Association of Realtors (to which all California Realtors belong) is sponsoring SB 30 (Calderon, D-Montebello). SB 30 will conform state law to the federal law passed on Jan 2. Upon passage of SB 30, the measure will be effective retroactive to Jan. 1, 2013.
Another new law is the California Homeowner Bill of Rights (AB 278 and SB 900). These laws generally prohibit lenders from engaging in the practice of dual tracking, or foreclosing while the borrower has an approved short sale or pending application for a loan modification, effective Jan. 1, 2013. Relief, at last, for Realtors who are trying to keep foreclosure at bay for homeowners when bona-fide short sales are in process (and sometimes only days to closing escrow).
An upturn in the market
Statewide, California home sales and prices closed on a high note in December, with the median price gaining for six straight months. The median price of existing, single-family detached homes climbed from $349,300 in November to $366,930 in December. The general opinion is that the lack of inventory brought this spike in prices.
The rush to complete sales of higher-priced homes by the end of the year to avoid an expected increase in capital gains, due to the “fiscal cliff,” pushed up sales of homes priced $500,000 and above by nearly 42 percent from December 2011.
The median price of single-family detached homes in El Dorado County in November was $300,000. Although up from previous months, it is still a little less than statewide, making El Dorado County an attractive place to invest. According to research from CAR, “owning a home is still the dream.”
To help navigate the way through the home buying/selling process, members of the El Dorado County Association of Realtors can offer quality assistance & years of experience. Use your local Realtors, lenders and title companies. We are here to help!