The South Carolina Real Property Valuation Reform Act of 2006 requires properties to be reassessed when there is a an "assessable transfer of interest", usually a change in ownership due to a sale. Also known as a point of sale reassessment, it can cause large increases in property tax bills.
Last year the General Assembly changes the rules for commercial property, including rental property and second homes. Such property is still reassessed, but the new value is discounted by 25 percent if the owner applies for the "commercial exemption." The discounted assessment cannot be lower than the assessment prior to the sale or transfer.
So what's the affect been? Large commercial deals are benefiting while the impact on second home sales is limited as many second homes are located along The Grand Strand where prices have been falling in recent years. Still, if you've owned property for a long time and still have a gain, the break may help you get a higher price than the guy next door who bought a few years ago.
Friday, March 30, 2012
Wednesday, March 28, 2012
February 2012--Sales Up, Prices Down
Real Estate sales along The Grand Strand rose 10.2 percent in February, to 541, compared to last year, significantly out pacing state wide sales which increased 4.8 percent. But prices continued to fall, 2.2 percent but compared to a state with increase of 2.6 percent. However, if you look at other areas in the state, we're doing better--Aiken dropped 18.1 percent, Greenwood dropped 17.3 percent, the Piedmont region fell 15 percent and north Augusta fell 13.3 percent. The median price of a house or a condo along the Strand fell to $135,000.
What are we likely to see going forward? --more of the same as the area works through a back log of foreclosures and a short sales. Then there is the shadow inventory--houses not on the market, but whose owners want to sell. Some are owned by banks and will hit the market as the foreclosure process is completed while others are owned by individuals waiting for the market to improve.
When can we see prices firming? Probably not until 2014. When can we expect to see prices increasing? Even further out and then nothing like the boom years 2000-2006. When prices start to increase again, they're likely to pace the rate of inflation, 2-3 percent a year.
Bottom line: A buyer's market for the next few years.
What are we likely to see going forward? --more of the same as the area works through a back log of foreclosures and a short sales. Then there is the shadow inventory--houses not on the market, but whose owners want to sell. Some are owned by banks and will hit the market as the foreclosure process is completed while others are owned by individuals waiting for the market to improve.
When can we see prices firming? Probably not until 2014. When can we expect to see prices increasing? Even further out and then nothing like the boom years 2000-2006. When prices start to increase again, they're likely to pace the rate of inflation, 2-3 percent a year.
Bottom line: A buyer's market for the next few years.
Wednesday, March 7, 2012
Tax Breaks for South Carolina Seniors
If you're turning 65, South Carolina has a deal for you, in fact lots of them.
In the year you turn 65 you can deduct $15,000 from your taxable income for the year and a married couple, if each spouse is 65, can deduct $30,000 which would save the couple up to $2100 in state income tax. And SC does not tax Social Security payments as some states do.
Next is a break on property taxes, over 65 and there's no tax on the first $50,000 of a home's value; the same break available to the blind and permanently disabled. The home must be one's legal residence and the homeowner must file an application with the county auditor's office. A savings of around $300.
At 65 you pay $20 for your annual vehicle registration instead of $24, small change, but every little bit helps. An annual pass for SC state parks, the Palmetto Passport is half price at $37.50 and can be purchased at any park office.
If you want to return to school, state supported colleges and technical schools must offer low or no cost classes for retired seniors on a space available basis, usually starting at age 60.
Discounts are also offered at many businesses, museums and attractions--just ask.
In the year you turn 65 you can deduct $15,000 from your taxable income for the year and a married couple, if each spouse is 65, can deduct $30,000 which would save the couple up to $2100 in state income tax. And SC does not tax Social Security payments as some states do.
Next is a break on property taxes, over 65 and there's no tax on the first $50,000 of a home's value; the same break available to the blind and permanently disabled. The home must be one's legal residence and the homeowner must file an application with the county auditor's office. A savings of around $300.
At 65 you pay $20 for your annual vehicle registration instead of $24, small change, but every little bit helps. An annual pass for SC state parks, the Palmetto Passport is half price at $37.50 and can be purchased at any park office.
If you want to return to school, state supported colleges and technical schools must offer low or no cost classes for retired seniors on a space available basis, usually starting at age 60.
Discounts are also offered at many businesses, museums and attractions--just ask.
Tuesday, March 6, 2012
FHA To Raise Fees
If you're buying or refinancing with a mortgage backed by the Federal Housing Administration you can expect their fees to increase, unless you hurry.
The agency is raising its fees in an effort to try to restore its depleted reserves, which suffered from the rising number of home owners who defaulted on their mortgages, and to try to encourage the return of more private capital to the market.
FHA loans allow for down payments as low as 3.5 percent and they often have less stringent credit requirements, which have made them soar in popularity in recent years. (The agency insures loans but doesn’t issue them.) About 40 percent of all new mortgages for home purchases in 2010 were FHA-backed mortgages.
Starting April 1, it will increase its annual mortgage insurance premium for loans under $625,500, from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, larger loan premiums will see an increase of 0.35 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount.
FHA also announced it will raise their upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount.
So, a borrower with a 3.5 percent down payment with a mortgage of $193,000 can expect to pay an upfront mortgage premium alone of $3,377, compared to the prior $1,930 but it can be rolled into the mortgage. The new fees will also apply to home owners who want to refinance their mortgages.
The raise in fees is expected to bring in $1.25 billion in additional revenue to the agency through September 2013.
The upfront increase is pretty stiff and isn't going to help home sales recover, not such a good idea if you ask me, but then they didn't.
The agency is raising its fees in an effort to try to restore its depleted reserves, which suffered from the rising number of home owners who defaulted on their mortgages, and to try to encourage the return of more private capital to the market.
FHA loans allow for down payments as low as 3.5 percent and they often have less stringent credit requirements, which have made them soar in popularity in recent years. (The agency insures loans but doesn’t issue them.) About 40 percent of all new mortgages for home purchases in 2010 were FHA-backed mortgages.
Starting April 1, it will increase its annual mortgage insurance premium for loans under $625,500, from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, larger loan premiums will see an increase of 0.35 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount.
FHA also announced it will raise their upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount.
So, a borrower with a 3.5 percent down payment with a mortgage of $193,000 can expect to pay an upfront mortgage premium alone of $3,377, compared to the prior $1,930 but it can be rolled into the mortgage. The new fees will also apply to home owners who want to refinance their mortgages.
The raise in fees is expected to bring in $1.25 billion in additional revenue to the agency through September 2013.
The upfront increase is pretty stiff and isn't going to help home sales recover, not such a good idea if you ask me, but then they didn't.
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