Arkansas Real Estate | Deaton Group Realty

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Little Rock AR Real Estate

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Where are the buyers?

A recent study showed the Top Three issues preventing buyers from completing purchases, and the top issue was one that hasn’t been around for the past few years.
According to the survey, the #1 reason keeping buyers from purchasing real estate for 2012 is “Economic Insecurity”.  While difficulties obtaining financing were cited as the leading challenge among buyers in 2010 (61 percent) and 2011 (65 percent), in 2012, the percentage noting this challenge dipped to 49 percent. Problems selling their current homes, similarly, declined in 2012 to 43 percent, down from 59 percent in 2011 and 57 percent in 2010.
Economic insecurity was not in the top three in 2011, nor 2010.  I was telling this to a seller of mine just yesterday.  Recent buyer activity has dropped drastically in Central Arkansas.  Since January 2012, the current inventory in Central Arkansas has risen from 1.7 months to 5.98 months of inventory!  That is a 250% increase in just 6 months.
There is a good amount of inventory now and some at great prices.  We all know that interest rates are at an all time low, again.  So what is the problem with the slow down in buyer activity?  We had experienced increases in the number of closed transactions til May 2012, but saw a drop in June, and I would expect another drop for July as activity has been slow so far this month.
It is actually getting easier to obtain financing, and most buyers know that pricing probably won’t continue to go down since 2010 & 2011 were the worst real estate years for our state in 15 years, and Arkansas prices actually increased by around 1% (not much, but better than the other alternative).
I did some recent research on my own to see what is going on.  Here is what I found out.
The number of buyers to active listings in January 2012 was 1 buyer for every 2 listings.  We experienced a huge January 2012.  For June 2012, it is 1 buyer per every 6.25 active listings.  Wow!  The listings are out there, but the buyers have shut it down!  I couldn’t understand why, but my guess was the economy and current policy.  Didn’t have any proof, until this survey was released today.

New Medicare tax creates incentive for home sales

New Medicare tax creates incentive for home sale

The Patient Protection And Affordable Care Act (“Obamacare”) will affect everyone in the United States one way or another. But some people will be affected more than others. Among these are high-income taxpayers. Starting in 2013, they will be subject to a brand new Medicare tax on their “unearned income.”
Who is subject to the tax?
Starting in 2013, a 3.8 percent Medicare contributions tax will be imposed on the lesser of (1) the taxpayer’s net investment income, or (2) any excess of modified adjusted gross income (MAGI) over $200,000 ($250,000 for married taxpayers filing jointly). Thus, all single taxpayers with MAGI over $200,000 and married taxpayers with MAGI over $250,000 will be subject to this tax. This is a small proportion of the population, but a significant one for the real estate industry.
What income is taxed?
The tax applies only to investment income. This includes:

  • gross income from interest, dividends, annuities, royalties, and rents other than those derived from an active business
  • the net gain earned from the sale or other disposition of investment and other non-business property, and
  • any other gain from a passive trade or business.

This includes just about any income not derived from an active business or from employee compensation.
Example: Sue and Sam, a married couple filing jointly, have a MAGI of $300,000 in 2013 which includes $100,000 of net investment income. Their MAGI is $50,000 over the $250,000 threshold, thus they must pay the 3.8 percent tax on $50,000 of their investment income. This results in a $1,900 tax.
Can the tax apply to the profit earned on home sales?
Yes. But, in the case of the sale of a principal residence that qualifies for the special tax exclusion on such income, it would apply only if the net gain from the sale exceeds the $500,000 exclusion for joint filers or $250,000 for singles, and then only to the extent that taxpayer’s income exceeds the $200,000/$250,000 MAGI threshold.
Example: Lucy purchased a home in San Francisco in 1995 for $250,000. She sells it in 2013 for $750,000. She also earned $100,000 in employee wages in 2013. She earned a $500,000 profit on the sale of her home ($750,000 – $250,000 = $500,000). She qualifies for the $250,000 home sale exclusion, so she is left with $250,000 of net investment income from the sale. This, added to her wages, gives her a MAGI of $350,000 — $100,000 over the Medicare tax threshold. Therefore, she must pay $3,800 in extra Medicare taxes (3.8 percent x $100,000 = $3,800).
This new tax gives homeowners who have very substantial equity in their homes a strong incentive to sell them in 2012 before the new tax takes effect.
By Stephen Fishman Inman News®

Secret Weapon to Boosting Home Values

Secret Weapon to Boosting Home Values
A recent study came out from the Center for American Progress, showing that home values in an area can get a big boost by reducing the amount of violent crimes in that area.  Communities that reduce violent crimes by 10 percent could potentially see billions of dollars in home price appreciation for the community or about a 0.8 percent increase in home prices, the study says.
Researchers found that reducing murders in a particular ZIP code followed a “predictable and significant increase in housing values in the same ZIP code in the next year.” For example, reducing crime by one homicide in a ZIP code in a year can lead to a home price jump of 1.5 percent for the next year, according to the study. Researchers also found that reducing homicides by 25 percent could lead to an estimated 2.1 percent increase in housing prices over the next year.
“The basic idea is that crime has a big negative effect on property values, and if you do a cost-benefit analysis, it will be a good investment and the impact on home values is statistically significant and very large,” Kevin Hasset, director of Economic Policy studies for the American Enterprise Institute, said during a conference call.
What’s more, the study finds that a 10 percent decrease in homicides and increase in home values could also drastically expand a community’s revenues from property taxes.
Wow, what a coincedence!  On June 11, 2012, Little Rock was ranked as the 6th Most Dangerous City in America due to violent crimes!
6. Little Rock, Ark. Violent crimes per 1,000: 14.9
Our city officials had better find a way to lower the violent crimes in our communities by finding ways to lower the poverty rates, lower unemployment, and increase the household median income, or our local housing market is going to have an even harder time recovering.

Homes for Heroes Program is now available in Little Rock and North Little Rock

Homes for Heroes Program is now available in Little Rock and North Little Rock
Guess who is Little Rock & North Little Rock’s newly appointed real estate agent to the Homes for Heroes Program?  That’s right, I recently became the official REALTOR with a national program called Homes for Heroes®.
Homes for Heroes® is an organization that was formed after the tragic events of 9/11 as a way say “Thank You” to the heroes of our nation.  It is an organization that gives back to our local heroes who include, but are not limited to: Military personnel, Police/Peace Officers, Firefighters, First Responders, Teachers, and Health Care Workers.  This program allows me to give back to my local community heroes by giving them discounts and rebates when they buy or sell homes, commercial real estate, or land with me.
We also have other professional affiliates that are willing to give back to our local heroes creating a well rounded savings package for our community heroes that continues to give back to them even after they close.  These include, but are not limited to: insurance companies, home inspectors, pest inspectors, title companies, stagers, contractors and other local businesses.
So get the word out!  Homes for Heroes® is available to our local heroes anywhere in the United States and you may be a hero or know of a hero that would benefit from this program.  This program does not stop at giving back when our heroes utilize our services.  We also offer the Homes for Heroes Foundation®.  The Homes for Heroes Foundation® is a public charity exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. Its mission is to provide or coordinate financial assistance and housing resources to our Nation’s Heroes such as Military personnel, Police/Peace Officers, Firefighter and First Responders who demonstrate neediness.
For more information about Homes for Heroes® or the Foundation, please log onto For your convenience please see the frequently asked questions attached.
This is where you, or a loved one who is active or a retired, can register for more information. Or you may contact me, Scott Deaton with Deaton Group Realty at 501-580-9151 or email: or website: