2006 Third Highest sales year on record

Total existing-home sales - Total existing-home sales - including single family, townhomes, condominiums and co-ops eased 0.8 percent to a seasonally adjusted annual rate 1 of 6.22 million units in December from a level of 6.27 million in November. Sales were 7.9 percent lower than a 6.75 million-unit pace in December 2005.

There were 6,480,000 existing-home sales in all of 2006, down 8.4 percent from a record 7,075,000 in 2005. The second highest total was 6,779,000 in 2004; NAR began tracking home sales in 1968.

David Lereah, NAR chief economist, said home sales remain historically high. "Despite all of the doom-and-gloom stories and dire predictions over the last year, 2006 was the third strongest year on record for existing home sales," he said. "It looks like we're moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices."

Quick Fixes that Add Value to a Home

If your clients are planning to sell their homes and don't want to take on large renovation projects, suggest the following quick fixes, which can help them maximize property value and appeal:

• Clients should stand outside their homes and take an objective look. They can boost their home's curb appeal by tidying flowerbeds, putting mulch around tree and shrub bases, and clearing foliage away from windows

• If time and budget allow, suggest that your clients paint the home's exterior with a neutral color and a contrasting trim coat. Experts say a fresh coat of exterior paint can boost a home's resale value by 10 percent.

• Ask them to consider replacing an old, wooden garage door with a roll-up door and automatic opener.

• Inside, your clients should create clean and bright spaces that are free of clutter.

• Ceilings should be clean and without signs of past damage such as water spots. If your clients' ceilings are coated with acoustic spray, also know as "popcorn," which is an older treatment that's very hard to clean, consider having them scraped, retextured and painted soft white.

• Suggest installing new light fixtures throughout the home, which can be purchased for as little as $20 each, and ceiling fans in the bedrooms (many models are available for less than $100). If not, at least replace all burnt-out light bulbs.

• Crown molding and upgraded baseboards can give a room model-home appearance at a reasonable price; walls should be free of damage and painted a light, neutral color.

• Carpets should be professionally cleaned or replaced with carpet of a neutral color.
  

PMI Makes changes to tax deductibility!!!

For the 2007 tax year, the Congress is allowing Mortgage Insurance to be TAX DEDUCTIBLE for families with ADJUSTED GROSS INCOMES (AGI) up to $109,000!! (To get full credit for the PMI, the borrowers' AGI cannot exceed$100,000; the eligibility is reduced by 10% up to a max AGI of $109,000)

Remember, this is AGI, which means that borrowers with householdunadjusted gross incomes possibly as high as $125,000 can qualify forthis benefit!!Why is this important?? In recent weeks, the rates, and cost, forsecond trust financing has skyrocketed, due to investor worries aboutincreased levels of foreclosure. These second trust products are not as attractive to the buyers in the current market. With PMI becomingtax deductible, your buyers can benefit by still achieving a low/nodownpayment, keeping total payments lower, only having one payment tocontend with, and getting the expanded tax benefits for having to payPMI, which serves to reduce their overall annual housing expense burden.

Why You Should Renovate?

Renovation experts agree that renovation just to improve resale value isn't necessarily wise, in part because you can't be sure of getting your money back. In fact, few projects yield dollar-to-dollar returns.

Your focus should be on improvements that make you and your family happy and more comfortable, and ones that keep your property maintained, safe and efficient.

Some experts also say that no renovation project is worth undertaking unless you plan on staying in your home at least three or four years. The rationale is simple: the longer you stay in the house, the more likely you are to recoup your costs as rising home prices absorb renovation expenditures. If home price don't rise, you at least enjoy the benefits of your upgraded home.