Dayton Home Sales & The Current Dayton OH Real Estate Market

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The Dayton housing market is buzzing! People are asking: “Are homes in Dayton selling?” “Where in Dayton should I buy a home?” “Has the Dayton housing market hit rock bottom?” “Are interest rates going to remain around 4%?”

Before I fill you in on just how I answer the questions above that are posed to me on a daily basis, I will first tell you this: I will not give anyone personal market predictions, false hope, or even stretch the truth just to make the market seem one way when in all reality it’s actually the opposite. With that being said, let’s get to answering the questions.

Are Homes In Dayton Ohio Selling?

The short answer is, Yes! I have a good amount of buyers right now and I cannot tell you how hard it is to locate and find inventory. I put my buyers on an auto-email provided by the Dayton MLS that will email them pictures, price, stats & location of homes that fit and meet their specific criteria. It seems like every time my buyers fall in love with a home and request that we schedule a showing, it just so happens that the home is currently under contract. I am not saying that every home in Dayton Ohio is selling – because they’re not. If you look closely, there are many homes that have been on the market for well over 120 days and some that have been on the market over 365 days.

What Does It Take To Sell My Home In Dayton OH?

The homes that are selling in the Dayton market are homes that are clean, well-manicured, 3 or more bedrooms, with very little left for the new homeowner to do upon moving in.  It’s as simple as this: If your home has no curb appeal, is messy, or needs a ton of repairs, it is not going to sell in this market. There are so many homes for sale in Dayton Ohio and the market is saturated with short sales & foreclosed homes – and potential buyers seem unwilling to purchase them because they consider them a potential money pit. I can also tell you that condos & townhouses in Dayton are currently very slow to sell. I’m hearing a lot of questions similar to this: “Why would I purchase a condo in Dayton or a suburb of Dayton for $150K and pay $167 dollars a month towards a condo (homeowners association) fee, have neighbors either beside me, underneath me, or on top of me – when I can purchase a home for the same price, have no homeowners association fee, and actually have a yard with neighbors more than a 2×4 and piece of drywall away from me?”

Where In Dayton Ohio Should I Buy A Home?

Wherever you feel most comfortable! I would never try and steer a buyer into a certain city, neighborhood, or even school district, everything is relevant. While some people might consider certain school districts in the Dayton area more desirable than others, your family’s personal preferences and needs should help guide your decision. For example, your children may have a lot of friends or participate in their favorite activities in one particular school district. Home buyers should make decisions based on things like property taxes, school district, resale, safety, and accessibility to and from work & leisure. I work the entire Dayton area – I’ll study not only the Dayton housing market, but also the housing markets of all the local suburbs like Centerville, Bellbrook, Springboro, Oakwood, & Kettering Ohio – which all happen to be great places to buy a home.

Has The Housing Market In Dayton Ohio Hit Rock Bottom?

In my professional opinion, yes! I would say the local housing market here in Dayton Ohio has hit “rock bottom.” However, I say this with full confidence that the housing market is rebounding and we will make a full recovery. Everything in this world seems to be cyclical….even bell bottom jeans and halter tops! With the days of  jumbo home loans being secured with “no look docs” behind us, I think the future of responsible home-ownership is settling in and mistakes made in the past (mainly by banks) are going to be very difficult (or even illegal) to make in the future. As far as interest rates go, I can’t really foresee rates falling below 4%. If interest rates fall any further, housing will turn into an entitlement – and at this point I’m not sure if the U.S. Government can afford any more entitlements. In all seriousness, I think we are going to see interest rates on the rise in the near future. One thing’s for sure – the days of the 4% – 30 year mortgage rates are about to come to an end.

Tips If You Are Currently Selling A Home In Dayton Ohio

1) It’s the 21st century, hire a 21st century Realtor! People DO NOT buy homes or sell homes using “Print Advertising” anymore.
2) Stage your home to sell! Whether you do it yourself or you hire a professional home stager…..Stage to sell!
3) Price your home to sell! Get a “Free Home Evaluation,” find out what your home is worth & price your home to sell!

Tips If You Are Currently Buying A Home In Dayton Ohio

1) Always be armed & ready with a “Pre-Approval Letter.” Getting pre-approved gives you a bargaining tool and the ability to act fast.
2) Always order a full home inspection by a Certified home inspector! Anyone can call themselves a “Home Inspector,” so make sure the one you hire is C-E-R-T-I-F-I-E-D.
3) Always compare the listing price of the home (asking price) with the current tax value of the home. Ask your Realtor to elaborate in further detail.

2013 Medicare Tax On Home Sales

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The Obama administration and Congress recently passed health care legislation imposing a new federal tax that takes effect on January 1, 2013. The legislation we are talking about is Section 1402 of the Health Care and Reconciliation Act of 2010 (part of the Patient Protections and Affordable Care Act). Commonly referred to as the “Medicare Tax,” the proceeds from this new tax will be allocated to the Medicare Trust Fund, which has been experiencing a bit of financial instability lately. The new legislation imposes a 3.7% tax on “unearned income” of “high income taxpayers.” So, what does that really mean?

2013 Medicare Tax – What It Means To Home Buyers and Sellers

Who is a “high income taxpayer?” If your filing status is “single,” you are considered a high income taxpayer if your adjusted gross income (AGI) is greater than $200,000. If your filing status is “married filing jointly,” you are a high income taxpayer if your AGI is greater than $250,000.

What is “unearned income?” It includes any income you derive from investing your capital. For example, it will include capital gains (only in the year the asset is sold), dividends, interest income and rents. It might also include investments in active businesses – but only if you are not an active participant in that business.

Now here’s where it gets a bit tricky. The 3.8% tax does not apply to all unearned income. It only applies to the net unearned income.  So, you’ll take the amount of income earned from those sources (capital gains, dividends, interest income, rents, and investments) and subtract the amount of expenses associated with earning that income. This is your net investment income. Once you have this number, compare it with your excess of AGI (over the $200,000/$250,000). The 3.8% tax is imposed on the lesser of these two numbers.

Example: You’re a single individual with an AGI of $280,000. Therefore, your excess of AGI is $80,000. Your net investment income is $75,000. The 3.8% Medicare Tax will be applied to the $75,000 (the smaller number).

Selling A Home? Some Sellers Pay Medicare Tax & Some Won’t

There is an existing primary home exclusion (called the “taxable gain”) of $250,000 for individuals and $500,000 for married couples filing jointly. If you sell your primary residence and your gain from the sale is less than those amounts, the Medicare Tax will not apply. However, if your gain from the sale is over the $250,000/$500,000 exclusion, the 3.8% tax will apply to the gain if you’re a high income taxpayer.

I’m Selling A Rental Property, Do I Pay 3.8 Percent Medicare Tax?

Your net investment income includes your net rental income. Your net rental income is determined by subtracting your allowable expenses (depreciation, property taxes, repair costs, etc…) from the gross rents. This amount is added to any other sources of income that qualify as net investment income. The same rules discussed above apply here. So, your net rental income might be subjected to the 3.8% tax – just depending on all the factors.

If you earn all of your income from real estate investments that you own/operate yourself, the income you derive from these real estate investments will not be taxed under the new Medicare tax.

The new Medicare Tax seems a bit tricky, but it’s relatively simple once you understand the basic guidelines surround the legislation. If you’re concerned about how the new Medicare Tax will affect you when buying or selling a home after January 1, 2013, we would be happy to help you understand the details.