Great News! It is official. The President has sign the homebuyer tax credit extension to law. Activity has already picked up in the area this week.
"Obama Signs Extended Tax Credit into Law"- Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010". . . . .
More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years."
"Which Properties Are Eligible? - The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be? - The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
1) The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
2) The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit." - Quoted from Realtor.org
Here is a helpful chart on the new home buyer tax credit changes. You will be able to compare the first home buyer tax credit plan that expires November 30, 2009 and the new plan that starts December 1, 2009. Chart supplied by the NAR (National Association of Realtors).
As a real estate agent, I really enjoy looking at homes. As you may have read from previous posts, there have been some rather outlandish things and ancient items and decor. Today, I was out with a buyer looking at multi-unit properties. The first one we went to was curious and intriguing. There were two sides, and on each side was an upper and lower apartment. One of the up stairs had the bath out in the hallway - not inside the locked apartment. We later found out when speaking to the owner that the home used to be a hotel about 100 years ago. There were old original stair cases on both sides that were in excellent condition with ornate detail in the woodwork. There were fireplaces in most of the rooms. Each room had been a keeping room in the hotel which was mainly used by guests for the opera house next door. Since the owner happen to be there, she took us through and told us many stories about the house and the neighborhood being that it was in her family for years. She even told us where the secret cubbie holes where, that her dad had made as a child. The original hotel had four stair cases instead of the two that were currently there. Additional staircases made the traffic flow smoothly. Below is a photo of a stove that was in one of the apartments.
The next home we viewed had a rather strange pipe coming out of the house. This duplex had a room on the third floor and there was a sink in it. There was no toilet and no tub - just the sink. Now even stranger, the sink drained out the side of the house and connected into the drain pipe from the rain gutter. If anyone has any idea what they were thinking, I would be interested.
Great News! Senate Democrats Agreed to to Extend First-Time Home Buyer Tax Credit. If you have paused your home search, get ready to go back out and look. The monetary cap is not as high but still very much worth the deal. For you home buyers who are ready to upgrade to your second home, now is the time because the buyers are going to still be enticed. Make sure you have your house priced right. There are still some great buys for "step up" buyers so have fun shopping.
"Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.
"The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples."
Today at my Real Estate board meeting it was discussed that there is a good chance of the Tax Credit being extended. Here are some items that are being proposed for the new extension according to a guest lobbyist for government affairs:
1) The tax credit could apply to "step up buyers", buyers who will be upgrading to a new home.
2) The "step up buyers" will have had to be in the home they are leaving for at least 7 years
3) Step up buyers" may have to be in their next home for at least three years.
4) The tax credit new deadline may extended to sometime in the spring of 2010.
5) If an executed contract is secured before the deadline, an extension for the credit could be possible for up to 60 days to complete closing.
"It seems likely that the U.S. Senate will approve a deal to extend the First-Time Homebuyer Tax Credit, but the devil is in the details.
Florida Democrat Sen. Bill Nelson told reporters traveling to Florida with President Obama on Monday that he thought that the extension would be approved, but both senators and representatives are among those who think that there should be some fiscal offset for the cost of the extension. . . . .
The proposal in the Senate that appears to have the most likelihood of passage would extend the $8,000 credit through March 31, then its value would drop by $2,000 for each of the subsequent three quarters of 2010. This plan was offered by Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus, a Montana Democrat."
According to the information below from Realtor.org, first-time home buyers accounted for almost half of home sales. I hope that the tax credit can be extended. Many of my recent activity has been buyers trying get the tax credit. This credit has also helped some of my sellers upgrade to their second home due to the first time home buyers purchasing their home. It will be interesting to see what congress decides in the coming weeks.
"Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.
Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.” . . . . .
Conditions for First-Time Buyers:
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September."
Vandergrift, PA tucked away NE of Pittsburgh, PA (founded in 1895) was the first town of its kind. This town was a planned industrial town and created to be sold to the workers of a Steel company that was founded at the time. George McMurtry, who was president of Apollo Iron and Steel (located in Apollo across the river from Vandergrift) needed to room to grow his company. Vandergrift was a large 650 acre farm that was picked to be the place for this new town. Frederick Law Olmsted designed the town and after being approached by George McMurtry at the 1983 World's Fair.
Lots in the town were offered to the workers of the mill so they could have their own homes. The town was built with paved streets and sidewalks. The homes included water, natural gas, electric and sewer lines. The town was actually built in advance and control turned over to the workers. At this time in history, this was a unique idea in America.
Today, Vandergrift is getting reborn. Buildings in the town are being renovated and updated with the help of the V.I.P (Vandergrift Improvement Program). Washington Avenue boasts of its large Victorian Homes with some homes on the National Register. There are lots of cute shops and on holidays and special occasions and Kiski Area football games residents and visitors line the streets for parades.
Read more about how Vandergrift was recently recognized nationally:
"A real estate Web site has determined Vandergrift ZIP code 15690 -- which includes portions of Allegheny, Parks and Gilpin townships -- is among the best places in the country to buy a home.
Using a system that considers home values and school performance, cyberhomes.com ranked the Vandergrift area as the fourth-best community in the country to live in its "2009 Home Value-Schools Ratings Report Card."
In addition, businessweek.com created its ranking and put Vandergrift at the top. The site used Cyberhomes data in building its list.
What makes Vandergrift's appearance on the lists notable is the relatively low value of homes in the area.
The median sales price in the Vandergrift area, according to Cyberhomes, is $65,600.
Median sale prices for the three communities ranking higher on the Cyberhomes list range from $260,000 to more than $725,000.
"(We) selected Vandergrift as an example of an area where home values are relatively affordable -- as compared to the national average and Pittsburgh area -- and schools performance is very highly rated," said Sarah Weissman, Cyberhomes product manager.
The median sales price in the Pittsburgh metropolitan area is about $125,000, according to Cyberhomes."
Many recent transactions and potential transactions that I have dealt with have been buyers who were enticed by the first time home buyer tax credit. Since you must close by November 30, 2009, the window is no longer open. The market has changed this month. I believe buyers are holding out to make their next move. It appears that the tax credit has done its job by pumping up the economy and reducing inventory. The National Association of Realtors is pushing for an extension of the tax credit.
Here is some information from the National Association of Realtors:
“The data on the present home buyer tax credit show that the credit has had its intended impact—sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,” Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy."
Staging is a very import process in selling a home. Some are more talented than others and some have larger budgets than others. Recently, I sold a home that was staged very well by an investor. We were quite surprised at the closing when my buyers and I met the home owner. This young single woman in her mid to late 20's was quite the investor with 300 rentals and close to 10 house flips in the process. One of her special talents was staging her properties. She has the man power to do the renovations and then she runs out and picks some a few pieces of furniture, throw rugs and some accents. She does such a great job with the cosmetic items, fresh paint, flooring and decor, it makes the place hard to resist. The staging really brings out the buyers emotions and draws them in. I must say it might make some people jealous being able to go out shopping each time she flips a house - which she pretty much does. She does not always use the furnishings over because most of the time the buyers ask her to include her furniture and accents with the sale of the house. It sounds like a win win situation for the buyer and the seller.
So sellers out there, are your walls and carpets dirty? I had a seller that was not able to see this even after potential buyers made comments. If you don't have extra funds for special accents, at minimum make your home squeaky clean and clutter free. You need to be competitive in this buyers market.
It is a great time for people to get into the housing market as I have mentioned over the last few months. There is still time to take advantage of the market conditions but don't wait too long. Things will change.
Believe it or not but I have had different buyers bidding and buying properties less than $20K and some that do not need that much work. It is an amazing deal and some did not need always need a major overhaul. As the market begins turn turn around there are going to be less opportunities like this. The deals that are there will be more competitive. Some houses such as these can have multiple bids on them (as many as five or ten bidders or more). If you see a deal move fast and bid competitively whether for investment property or for owner occupied.
It appears that first time home buyers have really taken advantage of the tax credit. ""First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®".
"This is a historic time," says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. "It's a great opportunity to make some great gains in the future." - Realtor.org, Associated Press
Attention Investors: This is an up and down duplex. Three bedroom on upper level unit (consists of 2nd and 3rd floor)- rents for $650/mo. First floor level consists of two bedrooms - rents for $600/mo. One year leases for both units were signed September 2009. There is a garage also that is rented out for $35/month. Sale Price: $46,900. Current owner has made many recent upgrades to the property. Contact today for more information and an appointment. MLS #795248
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Photo Copyright, 2007-2009 Amy Myers
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