On January 1 both the Senate and House passed H.R. 8 legislation to avert the “fiscal cliff” and the bill was signed into law by President Barack Obama the next day.

Below is a summary of real estate related provisions in the bill:

  • Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014.
  • Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012.
  • 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
  • 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.
  • Capital gains and dividends for individuals and families earning below $400,000 and $450,000, respectively, will remain at 15 percent. For those above those thresholds, the dividend tax rate will increase to 20 percent.
  • The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax. After that the rate will be 40 percent, up from 35 percent.

Take a look at sales figures in our local real estate market for 2012.

Midtown Montgomery real estate sales statistics for 2012 show the number of homes sold increased by 12% when compared to 2011. The average sales price decreased by 5% to $123,573 for the year. The median sales prices decreased by 6%, and market times increased by 1 day. The highest selling home price increased by 17%, and the lowest selling home price was 100% higher in 2012 than 2011.

But don't despair! I just finished a study of the market in its entirety, and it clearly shows that the Montgomery MSA bottomed out sometime in 2012 but has already come back. The median selling price 12/31/2011 was $125,000 and 12/31/2012 was $126,000. That's the first increase in median selling price since 2007.

Midtown Montgomery 2012 2011
Homes Sold 329 291
Average Selling Price $ 123,573 $ 126,610
Median Selling Price $ 104,000 $ 110,000
Days On The Market 132 131
Highest Selling Price $ 785,000 $ 649,000
Lowest Selling Price $ 3,000 $1

The good news is that the level of buyer activity in the Midtown Montgomery market is up substantially, which may mean an upturn ahead.

For the latest Midtown Montgomery real estate market conditions in your area, please call me at 800-HAT-LADY or visit HomesForSaleInMontgomeryAlabama.com.

Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.