The much-anticipated extension to the home buyer tax credit has finally been approved. The Senate's vote yesterday resulted in a 98-0 win and today it was passed in the house. The bill now moves to the President's desk for a final signature.
First-time home buyers have been eligible for tax credits of up to $8,000 since last January as part of this year's economic stimulus package. The newly backed program will expand the credit to include existing home owners.
Under the revised program, those who have owned a home for at least five years will be able to apply for tax credits of up to $6,500 when they purchase their next home. To qualify, buyers will have to sign a purchase agreement by April 30, 2010 and close by June 30.
The maximum purchase price on a home will be $800,000 with vacation homes not eligible. Income limitations are $125,000 for single tax payers and $225,000 for joint filers.
The National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) have been lobbying hard for the extension and expansion of the tax credit. NAR claims that so far, about 1.4 million first-time homebuyers have qualified for the program and they estimated that 350,000 of these buyers would not have otherwise purchased.
The tax credit is also set to be extended for another year for military personnel serving outside of the United States until June 30, 2011.
Senator Johnny Isakson, who heavily pushed for the extension, along with his own version that would have increased the credit to $15,000 stated, "This is probably the last extension."
But, is this really true? When April 2011 comes around and the housing market is still not in full recovery mode, will the politicians be able to let this go and actually come to an end, or could it possibly become a more permanent subsidy?
Anyone remotely interested in the real estate market has undoubtedtly heard that we've been on a bit of a roll lately.
Well, this month, the trend continues...Pending home sales index (calculated on contracts signed in July) rose another 3.2% this month. As I have said before, we're not out of the woods just yet. As the expression goes, "One month does not a trend make," but we have definitely seen a consistent trend in the market since early 2009.
For some perspective...
- Our current index is 12.0% higher than the level experienced last July
- The index has not been this high since June of 2007 (which is the month prior to activity really starting to drop off a few years ago)
"How are things locally?" you may ask. Quite well... Here are the statistics on the Pending Home Sales Index by region:
- The Northeast declined 3.0% but is 4.7% higher than July 2008
- The Midwest slipped 2.0% but is 8.1% above a year ago.
- The South rose 3.1% and is 12.0% above July 2008.
- The West jumped 12.1% and is 20.0% above a year ago.
If you've been waiting to buy towards the end of the year in order to take advantage of the tax credits that expire at the end of November, (NAR estimates that b/t 1.8 - 2.0 million first-time buyers will take advantage of the $8,000 tax credit - resulting in around 350,000 additional sales that would not have occurred w/out the credit), you better get going...
As reported by RISMEDIA, "Buyers have little time to act because they must complete the transaction by November 30, 2009 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible- it is taking approximately two months to complete home sales in the current market."
First, let me be clear...everything is relative in this market.
Good news isn't exactly what it used to be, but considering the L O N G, steady decline in home prices over the last 3 years, any mention of news about an increase in home prices is music to the ears of most homeowners/sellers.
Again, it's important to note that home prices are still in decline when compared to last year, but the S&P/Case-Shiller Home Price Indices (the leading measure of home prices in the United States), actually reported that the U.S. National Home Price Index improved in the second quarter of 2009.
There's still a 14.9% decline in the 2nd quarter of 2009 versus the 2nd quarter of 2008, but last quarter's decline was over 19%.
As you know if you've read my previous blogs or watched the news lately, home sales have increased each month for the last 5 months. Are we at or near the bottom? Maybe. Maybe Not. However, there's no denying that this is a good sign. If this continues for a few months, and the economy continues to steadily improve as it appears to be doing, there's no question that it will be a very positive step in the direction of recovery...
Click below to read the full artice...
Here are some recent articles of interest (click on the artice title to see the full story):
People ask me all the time... How's the market? Are people buying? Can someone actually sell their home in this market?
First, my 2 cents worth...There have definitely been some encouraging signs of late and this summer has been a busy time, but we're still a long ways from a "healthy market." Are we "at the bottom?" That is the million dollar question. Many economists and prognosticators have boldly claimed that the worst is behind us and real estate is "on the way back up." My personal opinion - no. I think we're certainly at or near the bottom, but I believe the bottom will be around for a while. I think prices will continue to drop to some degree, although I certainly believe they will drop much less rapidly than they have over the last 6/12/18 months.
Here's the main difference I've witnessed between this winter and this summer... This winter, a home that was listed in decent condition at a rock-bottom price may still sit and sit and sit on the market as few people were actually signing on the bottom line and purchasing homes. This summer, a similar home is under contract in 15 days or less (often with multiple offers). Does this mean there's huge demand/competition for decent homes? Not necessarily. However, if the home is well-priced, in good condition, and in a good location, then yes, these homes are in high demand.
It's a beauty competition out there. Those with the looks, talent and charisma get the prize; everyone else falls by the wayside. Do we remember the names of the 1st runner-ups in the Miss America contests or the teams that lost the Superbowl/NBA Finals/World Series? Probably not. Will a 2nd tier home "win the prize" and receive offers (offers worth consideration, anyway) in our market? Probably not. Buyers have gotten very, very, very picky (as well they should). If they find a home with so much as a beauty mark (unless the home is priced 20% or 30%...or more...below market value), they're likely looking elsewhere. Why wouldn't they?
The biggest problem I see with this...the average seller just doesn't understand that selling their home in today's market requires nothing less than a minor miracle. Most sellers just can't (or don't want to) understand that their competition isn't their neighbor down the street who "doesn't have as nice a yard" or "doesn't have a half-bath on the main level." Their true competition is the 100 foreclosures/short sales/corporate-owned properties within a 5-mile radius that are 30% cheaper.
Secondly, in addition to my personal experience/opinion, as you who read my blog already know, I like to show you the cold, hard facts and let you make your own judgments. June and July have actually been very good months relative to the market of late. This is certainly encouraging, but we've still got a ways to go...
OK - on to the facts...
The National Association of Realtors reported that pending home sales rose in June for the fifth straight month in the US. This was the 5th consecutive month that pending home sales rose. A rise in five consecutive months has not happened in 6 years (July 2003). The results were far better than analysts expected.
Also, for the first time in five years, home re-sales have risen for three months in a row, increasing almost 4 percent in June. "The housing market is healing and the patient is getting healthier at an accelerating pace," said economist Joel L. Naroff, president of Naroff Economic Advisors Inc.
Here in the South, we have experienced the biggest increase. The pending home sales index jumped 7.1% to 100.7 in the South (compared to only 2.9% to 100.4 in the West, 0.4% to 81.2 in the Northeast, and 0.8% to 89.9 in the Midwest).
Sales of new homes also posted their largest monthly gain in nearly eight years in June. The Commerce Department reported that sales of new single-family homes rose 11% in June (economists only expected a 3% increase).
Remember, the 1st time homeowner tax credits (and other credits) will be expiring soon. Click below for a current run-down of the available credits...
And finally, a word of caution regarding the tax credits. If you claim eligibility, you better make sure you're on the up-and-up (because the IRS is going to do their part to make sure you are)...
Boy, I wish the government had been giving me up to $9,600 when i bought my first house.
Congress passed the $8,000 tax credit for 1st-time homebuyers in February as part of The American Recovery and Reinvestment Act of 2009. In May, Georgia Governor Sonny Perdue signed HB 261, which allows all Georgia residents who purchase an eligible home to receive up to a $1,800 credit.
The biggest surprise I have about both of these programs...how many potential homebuyers still don't know about them. Well, I'm here to try and fix that problem.
The most important bit of information about each of these programs...
They expire on November 31, 2009!!!
Take advantage of them while you can!!!
Remember...with interest rates at historic lows (although they've risen dramatically at the end of May), your mortgage payment will be very, very low in comparison to your payment on the same house a year ago. With up to $9,600 back, that would pay your mortgage (at a 4.5% interest rate) on a $160,000 house for your 1st full year!
If you're a potential homebuyer or homeseller and you don't know already, the US Senate unanimously approved an admendment (proposed by Georgia Senator Johnny Isakson) to the stimulas package on Wednesday.
This amendment would allow anyone who buys a home in 2009 to receive a tax credit of 10 percent of the value of the home the buy, up to a $15,000 limit. This means that if you buy a home that costs more than $150,000, you will receive a $15,000 gift from Uncle Sam! If your new home costs less than $150,000, you will receive a credit for 10% of the purchase price of your home (i.e. a $120,000 home will allow for a $1,200 tax credit). Read more on this story here...
SHOULD THIS PASS, THIS IS TRULY A HISTORIC EVENT FOR THE HOUSING INDUSTRY!
Regardless of how you feel about the stimulus package as a whole, this is certainly a part of the package that can benefit you greatly as it relates to buying a new home (and will subsequently benefit sellers who are eager to sell their home).
As you may remember from last fall (covered in my blog on 8/2/08 - click here to visit that article), the current law provides for a $7,500 tax credit for first-time homebuyers only - and it has to be re-paid over a 15-year period. This new law would allow ANYONE who purchases a home to receive up to $15,000...and it never has to be re-paid!!! It's cash in your pocket - to do with as you please!
This comes after a very good December in national real estate news. Hard to believe, huh? Well, let's see how January & February (two of the traditionally slowest months in real estate) perform.
According to the National Association of Realtors (NAR), the Pending Home Sales Index for December 2008 (based on the number of contracts signed for that month), rose 6.3%, to a level that is 2.1% higher than it was in December of 2007.
Also, even more noteworthy, the NAR's Housing Affordability index (which shows the relationship between home prices, mortgage interest rates and family income) rose 10.9 percent in December to a value of 158.8. This value is THE HIGHEST ON RECORD since the statistics began in 1970!!! This indicates that homes have never been more affordable (at least since 1970) than they are today. See the full article here... With home prices as low as they can be and interest rates lower than they've ever been before, homes simply can't be any more affordable!
Is the economy weak now? Yes. Is housing looking more promising as each day passes? Potentially. January & February will be pivotal - let's see how it goes...
If you have any questions, please feel free to call or e-mail me!
Boy, oh boy - watching the news is not a fun thing anymore, huh?
The economy stinks, the stock market stinks, jobs are being lost, the sky is falling! So how's the real estate market? It's somewhat the same as anything else...If you have to sell something (products/goods, stocks, a home, etc.) it's going to be tough for you to find a buyer. Is it impossible? No - but are you going to get top-dollar? You better believe you're not.
However, there is a bright side...if you walk into a department store these days, you're likely to get an unbelievable deal on darn near everything in the store! If you want to buy stocks, you're going to get an incredible deal. If you want to buy a car (ESPECIALLY AN AMERICAN-MADE CAR), you're going to get a better deal on that car than you have ever been able to get in your lifetime.
THE SAME IS TRUE FOR REAL ESTATE.
Supply is at an all time high, so you have much more to choose from than you would if the market didn't favor buyers.
Sellers are more motivated than they've ever been in history to sell their home. Banks are overrun with foreclosures and are willing to give them away for (relatively speaking) pennies on the dollar. Many builders are in rough shape and are willing to negotiate their prices/terms much more so than at any time in recent history.
Interest rates are at an all-time low. A few months ago, I was writing that interest rates were at "near-historic" lows, but now they're truly lower than at any time in history. The National Association of Realtors is reporting that just before Christmas, Freddie Mac said the national 30-year rate fell to 5.19 percent - the lowest on record since the series began in 1971 (but guess what? they're even lower for us in Georgia!).
Because interest rates are so low, you can afford a much more expensive house than you could've just a few months ago. For instance, let's say you want your principal and interest to be around $1,050.00 a month. If your interest rate is 6%, you can purchase a $175,000 house. However, if your rate is only 4.5%, you can purchase a $208,000 home and you'll have the same $1,050.00 monthly P & I payment! As you probably know, that extra $33,000 will get you quite a better/bigger/nicer home. Even greater, because the market is so strong for buyers right now, you're going to get a home that's actually worth much more than $208,000...and when the market comes back, you'll be able to sell that home (should you choose to) at or above market value and cash in on your investment!
Of course, if you just want to take advantage of the low rates and save money when you buy a house, you can buy your $175,000 house and your payment would only be $866.00! That's a savings of $184.00 a month (or $2,200 a year)!
Let's review:Here's a brief summary of the advantages you will enjoy if you buy while interest rates are low and supply is high as compared to high interest rates and low supply...
Low interest rates and high supply...
You can get a $208,000 home at 4.5% for the same monthly payment as you would've paid for a $175,000 home at 6%.
Because supply is so high and sellers are selling at deep discounts (especially in the foreclosure or short sale market), you'll likely get a $230,000 or $240,000 (or more) home for your $208,000 purchase price. When you later try to sell the home, you will be in a very good situation.
However, if the conditions are reversed and interest rates are high and supply was low...
You would only be able to afford a $175,000 home for the same monthly payment at a 6% interest rate.
In a market where supply is low, sellers have the advantage and can get top-dollar for their home. Even if you buy a $208,000 home, you're likely to get a home that's actually only worth $190,000-$200,000. When you later try to sell the home, you're going to be in trouble.
OH BY THE WAY, DID YOU SEE THAT FORBES JUST DECLARED ATLANTA TO BE ONE OF THE TOP 10 CITIES IN THE NATION IN THEIR "BEST LONG-TERM HOUSING BETS" LIST LAST MONTH?
See www.4910HollandView.com (no log-in or personal info required) for complete information, tons of photos, interactive maps/driving directions, local/area & school info, etc.
Impeccable 5 bed, 2 full bath home in upscale Flowery Branch neighborhood. Outstanding location - extremely convenient to I-985& I-85! Wow-factor kitchen w/granite countertops, stainless steel appliances & tile backsplash. Dine in the formal dining room, breakfast nook, or breakfast bar. Owners have taken all the steps to perfect the inside and out for the sale of this home - new concrete (Hardiplank) siding, new A/C system, new exterior and interior paint, & new hot water heater! Enormous 5th bedroom or office/bonus/rec/media room offers great flexibility! Spacious 3-car garage and huge laundry room! Over .6 acre lot w/level play area and great patio. Only minutes from Flowery Branch High School and the Atlanta Falcons/Georgia Force training facility.
See www.4910HollandView.com (no log-in or personal info required) for complete information, tons of photos, interactive maps/driving directions, local/area & school info, etc.
Impeccable 5 bed, 2 full bath home in upscale Flowery Branch neighborhood. Outstanding location - extremely convenient to I-985& I-85! Wow-factor kitchen w/granite countertops, stainless steel appliances & tile backsplash. Dine in the formal dining room, breakfast nook, or breakfast bar. Owners have taken all the steps to perfect the inside and out for the sale of this home - new concrete (Hardiplank) siding, new A/C system, new exterior and interior paint, & new hot water heater! Enormous 5th bedroom or office/bonus/rec/media room offers great flexibility! Spacious 3-car garage and huge laundry room! Over .6 acre lot w/level play area and great patio. Only minutes from Flowery Branch High School and the Atlanta Falcons/Georgia Force training facility!
See www.4910HollandView.com (no log-in or personal info required) for complete information, tons of photos, interactive maps/driving directions, local/area & school info, etc.
Impeccable 5 bed, 2 full bath home in upscale Flowery Branch neighborhood. Outstanding location - extremely convenient to I-985& I-85! Wow-factor kitchen w/granite countertops, stainless steel appliances & tile backsplash. Dine in the formal dining room, breakfast nook, or breakfast bar. Owners have taken all the steps to perfect the inside and out for the sale of this home - new concrete (Hardiplank) siding, new A/C system, new exterior and interior paint, & new hot water heater! Enormous 5th bedroom or office/bonus/rec/media room offers great flexibility! Spacious 3-car garage and huge laundry room! Over .6 acre lot w/level play area and great patio. Only minutes from Flowery Branch High School and the Atlanta Falcons/Georgia Force training facility!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
The much-anticipated extension to the home buyer tax credit has finally been approved. The Senate's vote yesterday resulted in a 98-0 win and today it was passed in the house. The bill now moves to the President's desk for a final signature. 
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