Missed it again

We told you here a few weeks ago that if you were waiting for the bottom of the market in Coeur d'Alene and Hayden you likely missed it. Last month's sales figures continue to prove that point. If, on the other hand, you were waiting for the mortgage rates to bottom out, you likely have missed that too.

Last week mortgage rates increased by about three tenths of a point according to Freddie Mac. Still, rates are extremely low by historic measures and there are still good buys on real estate although competition is fierce in some market sectors.

There is no need to panic if you're in the market for a mortgage; Rates on the 30-year fixed-rate mortgage averaged 3.62 percent for the week ending Aug. 16, and remain low. Still, homeowners in the market to refinance might take notice that the increasing yields of Treasury notes could continue the rising mortgage rates.

Too much increase in too short a time frame could slow the real estate market as the past several months of historic low rates have many people accustomed to them and may cause them to delay purchase while waiting for another downturn. You shouldn't bank on that though. If the economy continues to improve, demand decreases for the ultra-safe securities issued by the U.S. Treasury, pushing up their yield. As those yields rise interest rates will increase.

There are a couple of other areas where people should not wait before taking action. One - we wrote about recently - is our supposition that the core of Post Falls will lose its eligibility for those zero down Rural Development loans sponsored by the United States Department of Agriculture. Population figures from the 2010 census has put Post Falls' population at a density high enough where it is not likely to continue to be considered "rural," the designation for these loans.

Post Falls has enjoyed a boost of sorts from these loans and demand for them still exists, but those folks who qualify may look to the Rathdrum area for homes that provide them an opportunity to buy for nothing down. The USDA's fiscal year does not end until Sept. 30 though, so if you hurry and find a place in Post Falls and you are approved for their RD program before then, you could still make it under the wire.

Another deadline, looming ever closer, is the one that should concern owners of second homes. Starting Jan. 1, 2013, people who sell those homes at a profit will be assessed a sales tax in addition to whatever liability they may have under capital gains law.

Rumors abound in cyberspace about how this 3.8 percent tax will affect anyone selling a home. Although we debunked this here on a couple of occasions the rumors are more frequent and as is often the case, more pervasive than fact.

Fact; the exemptions for taxes on profit of your principle residence are not affected by this new sales tax. True, this tax was a part of the oft maligned, "Obamacare," properly called the Patient Protection and Affordable Care Act, but it does not affect your home. The $250,000 ($500,000 for a married couple) tax free profit on that home remains tax free under the new law.

If you own a second home however, you will be taxed on any profit made when you sell that home if that sale occurs after Jan. 1. Even before the bill you would be taxed under capital gains laws which today is a maximum of 15 percent, but beginning in January, you will also be liable for a 3.8 percent sales tax on any profit you make on that home. Remember, we are Realtors, not tax advisers, so be sure to employ the counsel of a professional tax adviser when it comes to tax planning. The law is pretty clear; there will be a sales tax on profit from the sale of any home that is not a primary residence.

If you, like many others, are waiting in anticipation of a return to the rapidly rising value of homes and want to wait to sell your second home, make sure you factor in the sales tax when calculating your profit. Otherwise, sell it before the end of the year and avoid the tax.

Trust an expert ... call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the president of the Coeur d'Alene Association of Realtors. Kim and the sssociation invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664.