Realtors are required to market homes according to how the MLS service classifies their home. 490 homeowners have signed a petition to the Hyde Park Community Council and the Oakley Community Council to address and resolve the discrepancy. Lawmakers said they can amend the council community boundaries map if  both community councils agree on the changes and put it in writing.

The easiest solution would be for the Cincinnati Area Board of Realtors to amend the MLS system to include a new suburb code called ‘East Hyde Park’ that would cover these homeowners.

According to the language in the law, as explained in this FactCheck.org article, the Medicare tax would be assessed only on proceeds from the sale of a home that are ALREADY SUBJECT TO TAXATION.

Every American who sells a home can earn up to $250,000 of proceeds tax free from the sale of the property. Couples that are married can earn $500,000 of proceeds before having to sell taxes. Proceeds are your profit – so if you purchased a home for $100,000 and sold it for $300,000 your proceeds are are only $200,000.

Moreover the medicare tax would only apply to high earning individuals with annual incomes of – $200,000 individuals and $250,000 couples.  So in order to pay this tax a married couple would have to earn $250,000 in income and net over $500,000 in proceeds from the sale of their home. And the tax is only 3.8% on every dollar over $500,000.

Make sure that when you sell a property you always consult your tax professional for assistance in planning and recording for the IRS. The Government affairs office at the Cincinnati Area Board of Realtors provided additional information for this post.

• March 2010 vs. March 2009 = +13.97%
• April 2010 vs. April 2009 = +32.69%
• May 2010 vs. May 2009 = +25.43%

The $8,000 tax credit did have an impact on the sales volumes, and according to the board the sub $200,000 price point was particularly active. What is important to remember is that the tax credit ended in April, but closings can be as late as June 31 so expect to see strong June numbers as well.

Better yet is that inventory of homes has gradually decreased, bringing the market closer to balance.  With an inventory of 6.75 months we are leaving a ‘buyers market’ ( 7+ moths of inventory) but are a long way from a Sellers market (5- months of inventory).  Overall look for prices to stabilize and being to increase.  Cincinnati’s average home price is up 9.9% for the first 5 months of 2010 compared with the first five months of 2009.

There is wide belief that the First Time Home Buyer Tax Credit has helped increase sales volumes and help avert further decline in our area’s home prices.  The below graph shows the steady seasonal increase in sales that we see in our market during the warmer months of spring and summer. I am trying to impress on my clients that although the tax credit ends on November 1st, they truly need to have contracts written and the financing process started no later than the middle of October, and even that is cutting it close.