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Local Taxes
Over the past month, the counties and many municipalities have made decisions on the tax rates for 2012 based on various degrees of budget shortfalls.
The county picture is mixed:
• Calling for cuts elsewhere in its budget, Chester County held the line on taxes for the third straight year and will have a $513 million operating fund budget.
• In Delaware County, residents will pay 2.3% more in county taxes next year, after the Council unanimously passed a $324 million budget.
• And for the first time in 10 years, Montgomery County will be increasing property taxes. The county commissioners have unanimously approved a 17% increase.
Many local municipalities have also be grappling with this issue. With many local and school taxes rising as well, many residents in the region may see a change in their tax bills. Source: SWRA
A Raffle to Sell Your Home - Legal?
In these challenging economic times, homeowners and their agents are getting more and more creative in how they try to sell their homes.
One tactic popping up across the country is a raffle in which sellers offer a limited number of raffle tickets to prospective buyers then draw one winner who gets the home. One problem with this approach is that holding a raffle for a house is not legal in many states, including Pennsylvania.
“In Pennsylvania, paying for an opportunity to win a prize awarded by chance is defined as gambling,” said Hank Lerner, director of professional practice for PAR. “The only gambling activities allowed in Pennsylvania are horse racing, the lottery, bingo, casino games and certain games conducted under The Small Games of Chance Act. In short, a home raffle isn’t going to be legal under any of these rules.”
Lerner says there can also be problems for participants who purchase raffle tickets for this sort of giveaway. Aside from the chance that the raffle will eventually be called off, buyers should also be aware of raffle scams.
For example, thousands of ticket holders hoping to win a $1.6 million five bedroom mansion in Massapequa, N.Y. were victimized by a scammer who used more than $100,000 in raffle money on luxury items including airline tickets, lavish hotels and rental cars before his arrest earlier this year. Source: Hank Lerner, PAR Just Listed
Pennsylvania Fairs Better Than Most
Outside of Pennsylvania, the typical U.S. home has depreciated in value by more than 30 percent since the bursting of the housing bubble, according to Case-Shiller’s 20-City composite house price index. That is a larger decline than what was even seen during the Great Depression. But here in Pennsylvania, the average home has fallen in value by only nine percent, according to the Federal Housing Finance Agency (FHFA); less than a third of the national decline.
Even though the Commonwealth’s largest city of Philadelphia has fallen 19 percent from its peak, that’s still less price deflation than in 18 of the 20 cities tracked by Case-Shiller. And the Commonwealth’s second-largest city, Pittsburgh? Its average home price has fallen zero percent, according to FHFA. You read that right: zero deflation.
Of course, price deflation puts homeowners underwater: owing more money on their mortgages than what their houses are currently worth. Currently, about a quarter of all U.S. homeowners are in such a situation, according to one popular website. (Maybe they should be referred to as “homedebtors,” instead?) In Pennsylvania, only about eight percent of homeowners are in such a situation. Not only is this significantly less than the national average, but only three states (NY, OK and ND) can claim a lower percentage of negative equity than us. Source: Kevin Gillen, Ph.D
The Future of Local Appreciation Rates
Many in the real estate industry continue to hope that house prices will begin to appreciate once again after three years of rapid and persistent declines. Initially, only the “sand markets” were hard hit; now the median price decline is about 30 percent nationally. In Pennsylvania, we’re fortunate that the typical declines have been less in many sub-markets. At the same time, many forecasters are predicting a new round of declines for an additional 5-10 percent in the months ahead even in the Keystone State.
A recent study from Moody’s Analytics, a highly respected research firm, indicates that house prices may not be recovering to their 2007 peak levels for some time. In some cases, a very long time.
1. According to the study, the U.S. median price is not expected to recover to its former peak until 2021. However, there will be dramatic differences between various housing markets. NAR’s recent slogan “all markets are local” seems to take on new meaning in this context.
2. Where the foreclosure experience has been moderate (such as in many regions in Pennsylvania), the impact on softening house prices will also be moderate.
3. Well-located property may avoid the long delays in price recovery.
Source: Austin Jaffe, Ph.D., PAR's Consulting Economist
2011 Property Taxes
2011 Property Tax rates - A number of municipalities along the Main Line had changes to their real estate taxes as a part of their 2011 budgets. School district budgets are currently being drafted, and not available as of now.
Muncipality 2011 Millage rate
Narberth 8.775
Lower Merion 4.19
Haverford 6.359
Radnor 3.6411
Tredyffrin 2.23
Easttown 3.919
Phila. Real Estate Sellers See Hot Market for First-Timers
Philadelphia has made the top 10 in a new list by Forbes.com that ranks the best metropolitan areas across the US for renters to become first-time home buyers.The web site conducted the study of 42 real estate markets using real estate and mortgage data. Additional factors were jobs and quality of life. Source: KYW, Michelle Durham
Are PA Housing Markets Over-Valued or Under-Valued?
In 2006, a research study by National City Corp. and IHS Global Insight ranked U.S. housing markets on whether or not median home prices in 299 markets were “priced correctly.” They found that 213 of the 299 cities selected for the study were over-valued.
By 2010, only 87 of 330 cities studied were over-valued. The most under-valued market in the 2010 study was Las Vegas at 41 percent below fair value. Philadelphia was considered 16% over-valued in 2006 and by 2010 is considered 3% under-valued. Source: PA Assoc. of Realtors
Read a recent article on this topic by Alan Heavens which appeared in the Philadelphia Inquirer.
Taxes trend upward: 31 of Delco’s 49 towns raised taxes
Across the county, municipalities are facing declining revenues coupled with rising costs as officials work on balancing budgets during a recession. For many homeowners, that can only mean one thing — a hike in real estate taxes for 2010. Municipalities are pointing to a steady loss of revenue because of state cutbacks, lower building-permit fees, and fewer deed transfer taxes. In addition the steady increase of insurance premiums paired with declining revenue when implementing an increase in taxes have also been a burden to many local governments. Several municipalities in Delaware County were able to hold the line on taxes this year, with some even continuing decades-long streaks of budgets without an increase in property taxes. Source: Daily Times
Chester County growing fast
According to a study by the Pennsylvania State Data Center this month, Chester County will grow more over the next 20 years than any other county in the state. The county is projected to grow by 258,533 residents between 2000 and 2030, a 59.6 percent increase. Relative to neighboring counties, Chester County has a higher birth rate and more immigration from within the state, the country and overseas. Montgomery County should add 138,168 residents over that period, and Delaware County will add just 33,078 residents. That state´s population is projected to increase by 7.4 percet overall. Source: Suburban Wayne Tiimes
Chester County fares well on lists measuring wealth
Chester County has found itself in rather prestigious company, ranking among the top 50 counties across the country in three categories: wages and salaries, dividend income and adjusted gross income. The report, complied by the Transactional Records Access Clearinghouse at Syracuse University, looked at individual and joint federal tax returns filed in 3,140 counties nationwide in 2007. In Adjusted Gross Income, or AGI, Chester County ranked 21 at $96,578. On the Wages and Salaries list, Chester County ranked 15 at $70,404. Top employers include Vanguard, QVC and Sungard, which offer top wages. Chester County is home to a number of biotechnology companies as well. On the education front, Chester County has four universities and graduate campus Penn State Great Valley. In addition, the county has an excellent public and private high-school system within its borders. In Chester County, 42.5 percent of adults 25 and older have a bachelor’s degree or higher compared to 22.4 percent in the rest of the commonwealth, he noted. For the complete list, visit www.trac.syr.edu. Source: Main Line Suburban Life
Region’s “Classic Towns”
The Delaware Valley Regional Planning Commission (DVRPC) is touting some of Philadelphia´s first suburbs as “great places to live, work, and play.” The new marketing effort, titled “Classic Towns of Greater Philadelphia,” will feature the following townships and boroughs: Landsdowne (Delaware County), Media (Delaware County), Manayunk (Philadelphia), Overbrook Farms (Philadelphia), West Chester (Chester County), Doylestown (Bucks County), and Ambler (Montgomery County). The Classic Towns initiative is committed to the growth, revitalization, and support of the region's older communities. Source: Philadelphia Inquirer
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