Market Visual

In relation to my previous article, here's a graph showing how the market has changed over the past four years on the scenic coast. It's interesting to see what happened with sales in July of this year right after the upset in the mortgage industry. It's a good visual of how real estate changes from month to month and what it typically does during the different seasons of the year as well. I wish we had one predicting what the next four years will be like. It's going to be interesting!

The Current State of the Market

Just before we reach the holiday season, I thought you may want to know what's been happening with the market in Cayucos, Morro Bay and Los Osos recently and over the past six months.

For Cayucos, there are currently 49 residential single family homes and condos for sale, 4 pending sale, and 26 have sold in the past 6 months. The average time it is taking for a home to sell in Cayucos is 139 days, or approximately 4.6 months. The average sale price to list price is 94%, so if a seller listed their home for $800,000 it most likely sold for about $752,000. The median sales price during the same time frame is $842,500.

For Morro Bay, there are currently 108 homes on the market, 9 pending sale or in escrow, and 55 have sold over the last 6 months. The average time on the market has been 121 days, or about 4 months. And the average list price to sale price is 95.8%. The median sales price is $570,000.

For Los Osos, there are currently 102 homes on the market, 11 pending sale, and 77 sold in the last 6 months. Average days on the market has been 119 days and average list price to sales price is 95.6%. The median sales price is $469,000.

Well, I hope that will give you some idea as to what's been going on recently with the numbers, and where people are buying right now. For sellers, it's helpful to see the time it's taking to sell a home and the actual sales amount compared to list price, which is similar in all three communities. The main differences are the amount of inventory and the median prices. It will also be interesting to see what happens with the market over the winter and in the next year or so.

Bill Tightens Tax Rules for Second Homes

Here is an article taken from www.realtrends.com regarding new legislation just approved that could affect owners of vacation homes or investment property, which are quite prevalent in our community.

Popular legislation to ease the tax burden on struggling homeowners could hit an unexpected constituency: people with second homes. The Ways and Means Committee, the House's tax-writing panel, approved a bill last week under which homeowners facing foreclosure won't get stuck with a tax bill if part of their debt is forgiven by lenders. Currently, forgiven debt is treated as income to the borrower and is subject to tax.

The committee decided to pay for the tax break, as required by congressional budget rules, by restricting homeowners' ability to avoid or reduce the taxes on the sale of second homes. The gain in revenue would be equal to roughly $2 billion over 10 years.

Under current law, a person can exclude from taxes up to $250,000 in capital gains on the sale of a principal residence. Up to $500,000 of gains can be excluded for married couples. A second home can become a principal residence as long as the taxpayer has lived there for two of the previous five years. The bill approved yesterday would change those rules. Under it, the size of the tax break for a second home would be tied to the portion of time, out of all the years a house is owned, that it serves as a principal residence. Living in a property longer would result in a larger tax break on any gains when it is sold.