The Mortgage Deduction Comes Under Attack Again

Every few years, the idea of eliminating the mortgage deduction rears its ugly head again.  Although I understand and can even accept some of the arguments for getting rid of it, this isn't the time, nor do I trust Congress to enact something that, in the end, makes sense.  Look at all the parts of the Dodd-Frank Act that were bolted on, and how they have changed an entire mortgage industry, and not for the better.

The mortgage deduction is simple, understood by almost everyone, and factored into many people's homebuying decisions.  They calculated the affordability of their current homes based on what they would pay for housing after tax, and they counted on being able to do that for the life of their loan.  Changing the rules now risks starting a whole new cycle of mortgage defaults, foreclosures, debt modifications, and housing declines.

We all know that the strength and health of the housing industry is crucial to a lasting economic recovery.  We've been waiting for it to improve, and it has lagged badly over the past couple of years.  Many homeowners still haven't gotten to where they are "in the black" on their homes--in fact, New Haven county, which is one of the worst places in the state and in the country, still has 26% of homes that are "under water", meaning that they are worth less than the debt on them.  Why would we fool around with making that number worse, when we are just emerging from five years of price declines and depressed sales?  I don't get it.

It is certainly possible to come up with many reasons for making changes in the tax code, and we can all list things that we don't think are fair that still exist in its voluminous pages.  However, we all also know that housing is a bedrock of our fragile economy, and that, as many politicians have said over the years, "you don't change horses in midstream".  Let's leave well enough alone, at least until people can actually pay their mortgages and/or sell their homes.

Decorating for the Holidays

Are you the kind of person who puts up increasingly elaborate Christmas decorations every year, beginning on the day after Thanksgiving?  Do you bake dozens of cookies and special ethnic Christmas treats, filling your home with delicious odors for weeks before the actual holiday?  Do you entertain during the holiday season, keeping your house in tip-top shape for viewing?

If you answered yes to one or more of these questions, you may be a candidate for putting your home on the market now.  While there are fewer buyers at this time of year, it turns out that the ones that do look are more serious, on the whole, than the average person.  They also tend to want to move more quickly, as they may be starting new jobs after the first of the year.  Therefore, you can both reduce your competition by listing when others do not, and increase your chances of a serious buyer or two.

So, if you are up for keeping your house clean and tidy for the next few weeks, and you are otherwise ready to list, go for it.  Just remember that Santa will leave soot when he comes down the chimney, so don't schedule any showings for early on Christmas morning!

Returning to Normal

It's amazing how a couple of natural disasters can throw a wrench into real estate sales.  Some of us were just getting power back from Hurricane Sandy (including me--48 hours after our daughter in Lower Manhattan!) when the first nor'easter of the season hit.  Snow began falling mid-morning last Wednesday, and, by the time I was back in my office from an appointment in Milford, it was coming down like crazy.  I looked on weather.com to see what the prediction was, only to find that it was claiming that only rain was coming down now, and only rain would fall until evening.  Knowing that rain isn't white and that it doesn't stick to the ground, I was skeptical, but worked until high tide flood warnings sent me home just before dark.    Even right along the shoreline, there was enough snow to tie up all the roads and make it dicey getting up my driveway.  I was very grateful that my speaking panel and dinner in Hartford had been cancelled a few hours before!

When my kids were in school, they of course loved snow days--what kid doesn't?  I taught them early on that the sound of a ringing phone in a snowstorm was the sound of someone cancelling his or her real estate showing.  Very, very few people buy real estate in terrible weather.  That makes almost two weeks of few real estate appointments, with Thanksgiving coming next week, on the earliest day it can possibly fall.  Does that mean that the season for sales will last beyond Thanksgiving this year?  Let's hope so!