Recent Real Estate News/Notes: (Last Updated on 11/15/97)

• 11/97: (REAL ESTATE LOOPHOLE REMAINS)   Despite a battle in Congress, the House failed to pass a bill that would have closed a real estate loophole, permitting people to rent out a residence for 14 days a year, without claiming this income for tax purposes.
• 10/97: (REAL ESTATE TAX ADVANTAGES FOR RENTAL HOMES)   The new tax laws will permit the conversion of vacation or rental homes into principal residences, which will permit subsequent tax free gains to be recognized.
• 9/97: (NO HOME LOSS DEDUCTION)   Contrary to earlier year talk, there will be no provision to write off a home loss sale, under the new government budget proposal.
• 8/97: (LONG ISLAND REAL ESTATE MARKET BOOMING)   Median home prices on Long Island have risen by about 7 % over the last year, and are only about $ 12,000 (on average) below their 1988 market peaks, in value. The average home in Suffolk now goes for about $ 149,000, and the average home in Nassau is about $ 183,000. The recent surge is attributable to low interest rates and the bullish stock market.
• 7/97: (30 YEAR LOANS NOT WORTH IT)   Borrowers are better off with ARM mortgages. On a 30 year fixed mortgage, even if a borrower remains in his home for 10 years, he is paying the bank a premium for 20 years of rate risk that isn't being used. As such, ARM's may be much more attractive.
• 6/97: (POTENTIAL FOR HOME LOSS SALES TO BE DEDUCTIBLE)   There is talk on Capital Hill of Congress potentially passing legislation that will permit homeowners who sell their home for a loss, to be able to write this off against capital gains, and carryover the remaining loss over the years.
• 5/97: (CAPITAL GAINS IMPLICATIONS FOR REAL ESTATE SELLERS)   The proposed Capital Gains Tax circulating in Congress, which is rumored to allow single taxpayers exclude $ 250,000 in capital gains profits and married taxpayers to exclude $ 500,000 in real estate sales, will ONLY be in effect for sales that occur on/after May 7, 1997.
• 5/97: (TAX-DEFERRED EXCHANGES MAY BE DISALLOWED)   The Clinton administration capital gains tax relief proposal for home sellers may be offset with the elimination of tax-deferred property exchanges (see 2 news items below for further details on what the tax-deferred exchange of properties is).
• 5/97: (INTERNET SITE FOR SUFFOLK AUCTIONS)   A catalog of Suffolk County auction properties can be found at http://nysigti.gen.ny.us/nylocal/Suffolk.
• 4/97: (MORE EFFECTIVE TRUTH-IN-LENDING DISCLOSURES)   The Federal Reserve Board and the Department of Housing and Urban Development are looking to come up with more effetive truth-in-lending disclosures and home real estate settlement costs, to help consumers.
• 4/97: (TAX GAIN REDUCTION VIA TAX FREE PROPERTY EXCHANGES)   Section 1031 of the IRS code permits sale of investment or business real estate to be exchanged for similar replacement property. Tax-free treatment from the sale can only occur if cash is not received, and replacement property is purchased.
• 3/97: (HOME SALE PRICES IN 1996)   The following are the 1996 Long Island median home sale prices (and % change from 1995) for all Townships: BABYLON - $ 128,000 (+3.54%); BROOKHAVEN - $ 120,000 (-.02%); HEMPSTEAD - $ 171,000 (+1.52%); HUNTINGTON - $ 210,000 (+1.51%); ISLIP - $ 130,000 (+3.00%); NORTH HEMPSTEAD - $ 268,000 (+4.14%); OYSTER BAY - $ 210,000 (+1.58%); SMITHTOWN - $ 178,000 (-1.73%); EAST END - $ 185,000 (+1.75%)
• 2/97: (NEW PROPOSED CAPITAL GAINS LAW FOR REAL ESTATE)   President Clinton's proposed Capital Gains changes for real estate sales include a $ 500,000 profit tax exclusion for married couples, and a $ 250,000 profit tax exclusion for persons filing separately. This compares to today's $ 125,000 one-time tax exclusion for home sellers over the age of 55.
• 1/97: (LONG ISLAND HOUSING HITS RECORD IN 1996)   Long Island Housing Sales and new development hit record highs in 1996, with further new highs expected for 1997.
• 10/96: (HOME HEATING OIL PRICES HIGHER)   Average Home Heating Oil Prices on Long Island are currently $ 1.279 / gallon.
• 10/96: (TOWNSHIP AVERAGE HOME PRICES)   Average Long Island residential real estate prices by Township for 1st half 1996 (% change from 1995) are: BABYLON: $ 125,000 (+ 2.36 %); BROOKHAVEN: $ 114,000 (- 2.88%); HEMPSTEAD: $ 166,000 (+ 3.63%); HUNTINGTON: $ 190,000 (- 2.33 %); ISLIP: $ 120,000 (- 2.45%); NORTH HEMPSTEAD: $ 218,000 (+ 4.35%); OYSTER BAY: $ 200,000 (+ 2.57%); SMITHTOWN: $ 179,000 (- 2.62%)
• 10/96: (RELATIVES CAN LEND MONEY FOR DOWNPAYMENTS)   Parents and Grandparents can now lend their children/grandchildren money for a home downpayment and legally charge interest as well.
• 9/96: (LONG ISLAND HOME SALES ON THE RISE)   Home Sales on Long Island are on the rise, a good indication for the region's economy.
• 9/96: (CANDIDATES PROMISE WAIVING OF HOME SALE CAPITAL GAINS TAX)   Both Bill Clinton and Bob Dole are pitching (as part of election campaign promises) removal of a Capital Gains Tax on profits that result from Home Sales.
• 8/96: (DISCLOSING PROPERTIES CONTAINING LEAD-BASED PAINT)   This year a homeowner who sells or leases his home, must legally disclose if the property contains any lead-based paint.
• 8/96: (MILLION DOLLAR SURCHARGE TAX REPEALED)   The NYS 10% surcharge tax on real estate deals over $ 1,000,000 (known as the Cuomo Tax) has been repealed.
• 8/96: (BORROWING AGAINST FUTURE HOME VALUE)   HIML's (Home Improvement Mortgage Loans) allow the consumer to borrow against the projected future value of a home that takes future home improvements into account.
• 8/96: (FREE INFO ON DOWN PAYMENT ESCROW ACCOUNTS)   Under N.Y. State law, the seller's lawyer must put a down payment on a home in a separate bank account, and the buyer must be informed of the account. Call 800-442-FUND for a free booklet on Escrow rights.
• 7/96: (PROPERTY RIGHTS ACT MAY BENEFIT FEDERAL DEVALUING OF PROPERTY)  There is pending Congressional legislature that may permit homeowners to be compensated for property that is economically devalued due to federal actions that fulfill a public purpose.
• 7/96: (FHA LOWERS RESPONSE TIME ON LOANS)  The Federal Housing Administration loan program will decrease its loan processing time from 6 weeks to 6 days this summer.
• 6/96: (CANCEL PMI IF EQUITY OVER 20%)  If you have 20% or greater equity in your home, you legally do not have to pay PMI (Private Mortgage Insurance) to you mortgage lender, as part of your monthly payment. However, currently, there is no law that requires them to notify you of this once you attain the 20% equity. There is a proposed law on the table that would require lenders to notify the consumer of this.
• 6/96: (AMERICANS WANT TO OWN HOMES)  According to a national survey, Americans' desire to own a home is stronger than ever.
• 5/96: (ASSIGNED MORTGAGES CAN SAVE MONEY)  Money on closing costs can be saved by having a Seller's mortgage assigned to you. Items that can be saved on include NYState Mortgage Recording Tax and NYState Transfer Tax.
• 4/96: (TITLE INSURANCE INCREASE)  The New York State Insurance Department has approved a 6 % increase in Title Insurance premiums effective 5/1/96.
• 4/96: (LOW-INTEREST LOANS)  The state of New York Mortgage Agency is making $100 million in low-interest loans available to first-time home buyers who want to purchase newly built homes. For information call SONYMA at (800) 382-HOME.
• 4/96: (INCREASE FOR CAPITAL GAIN EXCLUSION)  There is currently proposed legislation in Congress that will allow the current $ 125,000 capital gain exclusion for senior homeowners to be increased to $ 200,000, providing that the the additional $ 75,000 be used for retirment health care.
• 3/96: (OFFICE MARKET TAKES A HIT)  The Long Island office market has lost almost 40 % of value between 1992-1995, and is not expected to see much recovery over the next several years.
• 3/96: (DEPRECIATION WRITE-OFFS MAY SUFFER)  Congress is now considering having rental property depreciation write-offs that are recaptured at sale to be taxed at 28%, as opposed to currently proposed 19.8% capital gains tax.
• 3/96: (WAIT IN GRIEVANCE PERIODS)  As of 1/1/96, most property owners in N.Y. who successfully grieve their property taxes and gain a reduction must wait 3 years before another grievance can be filed. The exception is for NYC homeowners, who can still file annually.
• 3/96: (PMI IS REQUIRED)  Mortgage Insurance (PMI) is required for any home purchase in which the downpayment is less than 20% of the home's appraised value. Moreover, putting 10 % or more down on a loan will result in lower PMI than if you were to put less than 10 % down.
• 3/96: (RENTAL PROPERTY DEDUCTIONS)  Sellers of rental properties cannot deduct costs such as attorney fees or broker commissions. They can be subtracted, however, from a home's selling price, thus reducing taxable profit.
• 3/96: (RENTAL PROPERTY DEDUCTIONS)  Home purchasing fees for rental properties such as the mortgage recording tax, title insurance, attorney fees, or a buyer broker's commission are not deductible, but are added to a home's basis value when it is sold, thus reducing taxable profit.
• 3/96: (RENTAL PROPERTY DEDUCTIONS)  Home improvements for rental properties that add value to property cannot be deducted, but are added to a home's basis value when it is sold, thus reducing taxable profit.
• 3/96: (RENTAL PROPERTY DEDUCTIONS)  Residential Property expenses that can be written off include mortage interest, real estate taxes, home equity loans, points, and moving expenses.
• 2/96: (CALVERTON SITE TO BE BUILT ON)  County/Town officials are considering using the Calverton Northrop Grumman site for either an amusement park, minor league baseball stadium, shopping center, or retirement community.
• 2/96: (REVERSE MORTGAGES DANGEROUS)  Experts warn that Reverse Mortgages can result in effective annualized loan costs greater than 20%, due to up-front fees.
• 1/96: (HOME SALE LOSS DEBATE)  Congress is currently debating as to whether or not a home sale loss will be allowed to be written off on a tax return.