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Polk County FL - Overall Existing Home Prices– November 2011

Overall Average Polk County existing home prices decreased from the previous month to $103,394 by  4% as well as the previous year by 2%.  Overall existing median prices of $89,000 fell slightly by 1% from October 2011. However, compared to the previous year, the median price rose by almost 6%.  Polk County’s overall existing number of home sales in November dropped off a bit to a total of 541, compared to 553 Polk County Homes sold in October 2011.

A look back in history of Polk County’s overall existing median home prices compared to November 2011 median price of $89,000:

November 2005 - median price $185,000 (-51.89%) - 723 homes sold

November 2006 – median price $187,000 (-52.41%) – 573 homes sold

November 2007 – median price $168,000 (-47.02%) – 377 homes sold

November 2008 – median price $126,992 (-29.92%) – 371 homes sold

November 2009 – median price $104,500 (-14.83%) – 593 homes sold

November 2010 – median price $84,000 (5.95%) – 498 homes sold

Take a look at the city you live in and see what the numbers are for November 2011 for existing home sales - single-family homes, condominiums, manufactured homes, duplex, villas, and town homes -including distressed homes in Polk County.  Please take note only sales recorded by Realtors® are taken into account. The source for this data is Mid-Florida Regional MLS Service; it is deemed reliable but not guaranteed. 

City         Average Sold Price              Median Sold Price              # of Homes Sold

What did Polk County Home Buyers buy?

109 home buyers bought at a price range of $49,999 and below

206 home buyers bought at a price range of $50,000 - $99,999

125 home buyers bought at a price range of $100,000 - $149,999

57 home buyers bought at a price range of $150,000 - $199,999

23 home buyers bought at a price range of $200,000 - $249,999

13 home buyers bought at a price range of $250,000 - $299,999

4 home buyers bought at a price range of $300,000 - $349,999

1 home buyers bought at a price range of $350,000 - $399,999

1 home buyers bought at a price range of $400,000 - $499,999

0 home buyers bought at a price range of $500,000 - $599,999

2 home buyers bought at a price range of $600,000 - $699,999

Most of Polk County home buyers paid cash, in fact almost 55% of all home buyers in Polk County paid cash.

Let me break down November 2011 Polk County existing homes sales into various categories:

• 450 Single family homes - median price $98,000 – 171 Average Days to Closing
• 30 Town homes, villas and duplex units – median price $73,000 – 134 Average Days to Closing
• 26 Condominiums – median sold price - $42,250 – 146 Average Days on Closing
• 35 Modular, manufactured/mobile homes in park/out of park – median sold price $39,500 – 159 Average Days on Closing

Overall Polk County’s Foreclosure and Short Sales Prices – November 2011!

There were 276 existing Polk County homes sold, not categorized as distressed properties, at a median sold price of $115,500 with 169 average days to closing.  Traditional sales (equity sales) counted for almost 51% of our total sales.

The distressed properties which includes Bank owned, pre-foreclosure, in foreclosure and short sales fell slightly in Polk County  as it accounted for 49% of our total sales for the month of November.

130 sold homes were foreclosures/REO Bank Owned – median price $59,000 – Average Days to Closing 87.

135 sold homes were Short Sales – median price $84,000 – Average Days to Closing 240.

2007 Mortgage Forgiveness Debt Relief Act- A Closing Window Of Opportunity in 2012

As someone who specializes in Phoenix short sales, I wanted to take a moment to discuss what I feel will be the "800-pound gorilla" for distressed homeowners in 2012...The expiration of the 2007 Mortgage Forgiveness Debt Relief Act on December 31, 2012.

First, I need to disclose to you that I am not a CPA, and I highly recommend that anyone looking for in-depth information on this topic visit with a CPA and/or a qualified tax attorney.  My intent here is to simply summarize the details of this important legislation, and wrap up with my thoughts on the importance of it to distressed homeowners.  

So, what is the 2007 Mortgage Forgiveness Debt Relief Act?

Per the IRS.gov website, "The Mortgage Debt Relief Act of 2007 was enacted on December 20, 2007.  Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence".  Let me give you a very simplified example.  You borrow $200,000 and either default on the loan (foreclosure) or short sell the home for $100,000.  In the case of the foreclosure, we'll assume that the lender sold the home at auction for $100,000 as well.  In either case, if the lender is not able to collect the remaining debt from you, there is a cancellation of debt of $100,000, which would otherwise be taxable to you, the borrower.

Is Cancellation of Debt Income always taxable?

No, there are exceptions.  Here are some of the most common situations where the cancellation of debt income IS NOT taxable.  The following was taken directly from the IRS.gov website:

• Qualified Principal Residence Indebtedness- The home must be your "primary residence" in order to qualify for the 2007 Mortgage Forgiveness Debt Relief Act.
• Bankruptcy- Debts discharged through bankruptcy are not considered taxable income.
• Insolvency- If you are insolvent at the time of the debt cancellation, some or all of the cancelled debt may not be taxable to you.  You are insolvent when your total debts are more than the fair market value of your total assets, according to the IRS.
• Certain Farm Debts- If you inccured the debt directly in the operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
• Non-Recourse Loans- A non-recourse loan is a loan for which the lender's only remedy in case of default is to repossess the property being financed or used as collateral.  That is, the lender cannot pursue you personally in case of default.  Forgiveness  of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income.  However, it may result in other tax consequences.  HELOC's (Home Equity Line of Credit") are generally NOT considered eligible for the Mortgage Debt Relief Act.

You can learn more about these exceptions by reading Publication 4681.

What does exclusion of income mean?

Normally, debt that is forgiven or cancelled by the lender is considered to be income to the IRS, and should be included on your personal tax return.  The Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income.  Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?

No.  According to the IRS, the Act only applies to "forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.  In addition, the debt must be secured by the home.  This is known as qualified principal residence indebtedness, and the maximum amount you can treat as qualified principal residence indebtedness is $2 Million or $1 Million if married filing separately".  We have had cases whereby our client took out a HELOC in order to pay for improving the home.  In these cases, their debt qualified for the Act, and they were not forced to pay taxes for the deficiency.  Again, each case is different, and only a CPA can give you direction on this issue.

Does The Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?

The debt qualified, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified.  This question often comes up with our clients that have refinanced at some point.  The main problem that comes up is for those borrowers who chose to conduct a "cash-out" refinance.  Generally speaking, any cash that is taken above and beyond the original loan amount is considered taxable in the case of a foreclosure or short sale, unless the funds were used to substantially improve the property.  Again, consult with your CPA for more direction on this common situation.

If the forgiven debt is excluded from my income, do I have to report it on my tax return?

Yes.  It must be reported on Form 982 and this form must be attached to your tax return.

How long is the Act in effect?

The Mortgage Forgiveness Debt Relief Act expires on December 31, 2012.  At this point, I am not aware of any talk in our government in regards to extending it past this date.  My hope is that the National Association of Realtors will ramp up their efforts in 2012 to push for it's extension.  

Obviously, there are many, many more questions that you may have in regards to your particular situation.  Again, I strongly recommend that you contact a CPA that is familiar with this Act, and ask him/her how it relates to your current predicament.

So, what's the big deal if the Mortgage Forgiveness Debt Relief Act isn't extended?

If you or someone you know is contemplating a foreclosure or short sale in 2012, I strongly recommend that you consider your options early in 2012.  If this Act isn't extended, borrowers who choose to mitigate their losses in 2013 stand to not only lose their home, but could face a HUGE financial hit by having to pay income taxes on their cancelled debt.  Please remember that a short sale can take 4-6 months to complete, making it critical to start the process early in 2012.  Those borrowers who choose to start the process in June or July are running the risk of their home closing escrow in 2013, which makes all of their efforts a moot point.

Bank lobbyists will be pushing to have this legislation end on it's intended date of December 31, 2012.  By allowing it to end, lenders will be given yet another stick to beat borrowers over the head with, and they will be using it to their full advantage during the 2nd half of 2012.  I can hear it now..."Make your payments, or we will foreclose in 2013, and you will be responsible for paying income tax on your deficiency".

This critical piece of legislation has saved distressed homeowners un-told millions of dollars since it's passage in 2007.  Those that act early in 2012 will be happy they did.  Those that procrastinate to squeeze out a few more months of "free-living" will wake up in 2013 and wished they had heeded the advice of their experienced short sale agent and/or CPA.

If you're a short sale agent, do your part to spread the word.  If you're a homeowner that wants to learn more about the short sale process, visit our Phoenix short sale FAQ's page, or feel free to contact me directly.

Until next time...

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Bob Hertzog

Summit Home Consultants

Copyright © By Bob Hertzog 2011 *2007 Mortgage Forgiveness Debt Relief Act-A Closing Window Of Opportunity in 2012*

 

 

 

 

 

 

 

Eaglebrooke in Lakeland FL is located in a rural area that offers a peaceful and tranquil atmosphere. You will surely take in the lush green highly maintained landscaped properties, tree lined streets and exquisite homes and feel relaxed and rejuvenated. This 24 hr. manned gated country club community offers beautiful homes for sale. You can find great deals for the first time homebuyer as well as for the most discriminating buyer.  There are various layouts and floor plans, to suite the needs of you and your family. Many homes come with 3 to 5 bedrooms and 2 and 3 car garages. Space, square footage and prices vary.  

Copyright © 2011 By Petra Norris *Eaglebrooke Homes for Sale - Lakeland Florida*

Carillon Lakes in Lakeland FL is conveniently located minutes from Polk Parkway and Interstate 4, Carillon Lakes is a 24hr man-gated community situated southwest Lakeland, Florida and has almost 650 homeowners according to their newsletter. Carillon Lakes community has a lot to offer for families and retirees such as swimming pool, tennis courts, basketball court, fitness center, playground and a club house at the Town Center which can be rented for family gatherings such as birthday parties and other social gatherings.

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