Sales way up in DEC 2009

Mark Killion — Tue, 26 Jan 2010 21:15:06 +0000

According to a recent report, sales in December 2009
were up 33% compared to December 2008. Sales
have been up 6 months in a row! But, overall, sales
for the year were flat compared to 2008.

In many areas of the city, the number of properties
sold is trending up while the selling price is
trending down. So demand is being driven by
increased affordability and the tax credit.

Also, investors are back in the market snatching up
deeply discounted bank owned properties. The
distressed property sales are pulling down Chicago’s
median value. There are properties on the South
and West Sides selling for $20,000! But, I think
that certain areas, like the South Loop and the Near
North side, are stabilizing. Sales activity in those areas
is high, but there is also a lot of inventory on the market.

Hopefully, when the tax credit expires, consumer
confidence will be higher than it is currently. The
timing is good, because it expires during the busy
Spring selling season. So right when it expires,
seasonal demand will be picking up.

I think we hit bottom around July/August 2009.
There is a lot of pent-up demand out there. But there
is even more uncertainty. The main concern now is
job creation. But, I think overall that 2010 will be a better
year than 2009.

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

Tax Loophole closed…watch out!

Mark Killion — Thu, 21 Aug 2008 04:09:33 +0000

Tax Loophole closed…watch out!
In a previous post, I talked about how Uncle Sam allowed a couple to keep up to $500,000 in profits tax free when they sold their property. This was assuming they had lived in that property for 2 of the last 5 years.

So a couple of savvy investors could:

1) Buy a property in a fast appreciating area.
2) Rent said property for 3 years.
3) Move into said property for 2 years.
4) Sell said property and pocket up to $500,000 tax free!

Then, they could reinvest half of the tax free money, and
repeat steps 1 to 4. As they say, knowledge is power. I’m sure more than a few people got rich off of this maneuver.

Well, as they also say, all good things must come to an end.
(who is ‘they’ anyway?

Apparently, this tax loophole has been closed. As part of the Housing Crisis Relief Bill, Congress modified the tax code for this scenario. Now, in the above example, the couple would be taxed
on the three years that they didn’t live there. In the above scenario, they didn’t live there 60% of the time. So, they would be taxed on 60% of the profit (or $300K). That would be a HUGE Tax bill. Could you imagine having to write a check for that bill on April 15th? This is really where the mortgage relief money will come from. By changing this tax code, Uncle Sam will generate billions in additional tax revenue.