After the Senate gave final approval last night without a dissenting vote, the House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow.

The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

The legislation takes effect December 1 and is not retroactive. Both credits are available only for primary residences, not second homes or investment properties.

It is virtually certain that the President will sign the legislative package, which contains an expansion of unemployment benefits as well as the tax changes.

The legislation included provisions added to address complaints of fraud. The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department’s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.

The legislation also contains a provision supported by the National Association of Home Builders which will help larger companies strapped for cash with net operating losses (NOL). Ordinarily these companies can carry back these losses for only two years to qualify for a tax refund. The provision would make this process extend the carry-back to five years for either 2008 or 2009. The tax break will now apply to losses in either 2008 or 2009, and the income cap will come off.

Comment - this should help keep buyers in the market for quite some time... and perhaps provide a benefit over the normally slower holiday season..

Different people have different notions of what cheap means and buying isn't an option for everybody. Many renters are now losing jobs and banks are raising standards for mortgages.

But renters should always evaluate the decision of whether to rent or to own.... Here is a list of American's Cheapest Homeownership Markets...

Some summary information from the link noted above...

1. Detroit Metro (Mich.)
Own/rent ratio: 94%
Annual cost to own: $8,519
Annual cost to rent: $9,072

Detroit is best known as the home of the Big Three automakers: General Motors, Ford, and Chrysler. The city has been hard-hit by the recession because of its dependence on the struggling auto industry. Detroit was the 11th largest metropolitan area as of 2007, with a population of nearly 4.5 million. It had and unemployment rate of 17.1% in June, the worst of any metropolitan area with a population over one million.

2. Pittsburgh Metro (Penn.)
Own/rent ratio: 97%
Annual cost to own: $8,947
Annual cost to rent: $9,252

The Pittsburgh area, located on the west side of the state, has a population of about 2.3 million. This former steel town now has large employment in the education and health-care industries. Heinz and United States Steel have headquarters there. The area has escaped the worst of the recession and had a 7.7% unemployment rate in June.

3. Rochester Metro (N.Y.)
Own/rent ratio: 113%
Annual cost to own: $9,523
Annual cost to rent: $8,448

Located near Lake Ontario, the Rochester metropolitan area has a population of more than 1 million. Rochester is home to Eastman Kodak and the University of Rochester. The Rochester unemployment rate was 8.4% in June, not seasonally adjusted. In the first half of this year, one in every 276 houses received a foreclosure notice in the Rochester area, according to RealtyTrac.

4. Memphis Metro (Tenn.-Miss.-Ark.)
Own/rent ratio: 114%
Annual cost to own: $8,593
Annual cost to rent: $7,524

Memphis is located on the Mississippi River and the metropolitan area has a population of more than 1.2 million. The city is known as the birthplace of rock and roll. Elvis' estate, Graceland, is in the area. FedEx, AutoZone and International Paper are headquartered there. The Memphis area ranked 43rd in the nation in foreclosure notices in the first half of 2009 according to RealtyTrac.

5. Tampa Metro (Fla.)
Own/rent ratio: 115%
Annual cost to own: $10,823
Annual cost to rent: $9,444

South Florida is has been hit hard by the recession, and home prices in Tampa have taken a dive. The metro was the country's 19th-largest in 2007, with a population of more than 2.7 million. OSI Restaurant Partners and WellCare Health Plans are headquartered there. The Tampa Bay area also relies on the tourism industry.

6. Cleveland Metro (Tenn.)
Own/rent ratio: 119%
Annual cost to own: $9,934
Annual cost to rent: $8,364

Cleveland, Tenn., is located in the southeast corner of Tennessee, near Chattanooga. Major employers include Johnston Coca-Cola Bottling, Whirlpool, and Rubbermaid. With a population of approximately 112,000, the Cleveland area is among the smallest on this list.

7. Dayton Metro (Ohio)
Own/rent ratio: 119%
Annual cost to own: $8,420
Annual cost to rent: $7,056

Home prices and employment in Dayton have both taken a hit in the recession. The unemployment rate in the area was 12.1% in June. The Wright-Patterson Air Force Base is a large employer in the area.

8. Columbia Metro (S.C.)
Own/rent ratio: 123%
Annual cost to own: $9,885
Annual cost to rent: $8,016

Columbia is the state capital and home to the University of South Carolina. The metropolitan area had about 700,000 people as of 2007. The city's large employers are the state government and University of South Carolina, two industries that are more recession-proof than others, and so it has been spared from the worst of the crisis. However, the unemployment rate still reached 10% in June (not seasonally adjusted).

9. Orlando Metro (Fla.)
Own/rent ratio: 124%
Annual cost to own: $12,107
Annual cost to rent: $9,756

The Orlando metro area, in central Florida, has a population of more than 2 million. Orlando's economy relies heavily on tourism from Walt Disney World, Universal Studios, and SeaWorld amusement parks. The metro area ranked 10th in foreclosure notices in the first half of 2009, according to RealtyTrac. It had an unemployment rate of 10.8% in June, not seasonally adjusted.

10. Dallas-Fort Worth Metro (Texas)
Own/rent ratio: 124%
Annual cost to own: $11,037
Annual cost to rent: $8,880

Home sales in the Dallas-Fort Worth area were flat in the second quarter of 2009 after several declines, according to the National Association of Realtors. Mortgage rates are low, making this a good time for home buyers. The Dallas-Forth Worth region was the fourth-largest metropolitan area in 2007 and the largest city on this list. It had a June unemployment rate of 8.2%. American Airlines and ExxonMobil are headquartered in the area.

As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area - covering both downtown and many Chicago suburbs. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS!

If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on YOUR side – looking out for your best interests.

Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. We show more types of properties. Besides all MLS listed properties by any company - we show for-sale-by-owner, short-sale and foreclosure properties, properties that aren't advertised, and much more.

If You Become our Client - You Can Be Assured That We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....(Not a "Salesperson")

Best of All - You are Nothing Out of Pocket to Us For Our Services...

If you have excellent credit and are thinking about buying a home between $250,000 to $2 million in the Chicago Illinois area during the next 60-90 days:

In West Palm Beach Florida - a couple recently discovered that their relaxing retirement was put on hold when they discovered their new home had been built with Chinese drywall that emits sulfuric fumes and corrodes pipes. It got worse when they asked their insurer for help -- and not only was their claim denied, but they've been told their entire policy won't be renewed.

Thousands of homeowners nationwide who bought new houses constructed from the defective building materials are finding their hopes dashed, their lives in limbo.

Insurers drop policies or send notices of non-renewal based on the presence of the Chinese drywall.

At least three insurers have already canceled or refused to renew policies after homeowners sought their help replacing the bad wallboard. Because mortgage companies require homeowners to insure their properties, they are then at risk of foreclosure, yet no law prevents the cancellations.

During the height of the U.S. housing boom, with building materials in short supply, American construction companies imported millions of pounds of Chinese-made drywall because it was abundant and cheap.

An Associated Press analysis of shipping records found that more than 500 million pounds of Chinese gypsum board was imported between 2004 and 2008 -- enough to have built tens of thousands of homes.  Shipments were heavily concentrated in the Southeast, especially Florida.

The defective materials have been found to emit "volatile sulfur compounds," and contain traces of strontium sulfide, which can produce a rotten-egg odor, along with organic compounds not found in American-made drywall.

Homeowners complain the fumes are corroding copper pipes, destroying TVs and air conditioners, and blackening jewelry and silverware. Some believe the wallboard is also making them ill.

The federal government is studying the problem and considering some sort of relief for homeowners.

Homeowners have little recourse since neither the Chinese manufacturers nor the Chinese government are likely to respond to any lawsuits or reimburse them for the defective drywall.

Insurers learn of the drywall through a claim filed by the homeowner seeking financial help with its removal.

Insurance companies consider the drywall a pre-existing condition that could lead to future damage, which is why the company won't renew the policy unless the problem is fixed.

Even if a homeowner does not file a claim over the drywall and remains covered, they could later be denied a claim for a fire or another calamity if insurance investigators determine the home contained undisclosed Chinese drywall.

As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area - covering both downtown and many Chicago suburbs. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS!

If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on YOUR side – looking out for your best interests.

Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. We show more types of properties. Besides all MLS listed properties by any company - we show for-sale-by-owner, short-sale and foreclosure properties, properties that aren't advertised, and much more.

If You Become our Client - You Can Be Assured That We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....(Not a "Salesperson")

Best of All - You are Nothing Out of Pocket to Us For Our Services...

If you have excellent credit and are thinking about buying a home between $250,000 to $2 million in the Chicago Illinois area during the next 60-90 days:

If there is to be another stimulus (i personally say - just let market forces be market forces... prices adjust..) -- the move-up and luxury markets are the ones needing the most help.

See this article for more information.

The sponsor of the original Senate bill, Johnny Isakson, Republican of Georgia, is back with a new bill that would give a maximum $15,000 credit to any buyer who stays in a home for at least two years.

The Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute.

It labeled the original credit as one of the worst provisions of the stimulus package, on the grounds that the money is a bonus for people who would buy a house anyway.

The center has an even dimmer view of extending the credit to all buyers.“Is this the best way to spend money we don’t have?” asked senior fellow Roberton Williams.

As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area - covering both downtown and many Chicago suburbs. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS!

If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on YOUR side – looking out for your best interests.

Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. We show more types of properties. Besides all MLS listed properties by any company - we show for-sale-by-owner, short-sale and foreclosure properties, properties that aren't advertised, and much more.

If You Become our Client - You Can Be Assured That We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....(Not a "Salesperson")

Best of All - You are Nothing Out of Pocket to Us For Our Services...

If you have excellent credit and are thinking about buying a home between $250,000 to $2 million in the Chicago Illinois area during the next 60-90 days:

According to NAR, the national share of home sales above $750,000 has fallen from 4.4 percent in 2007 to approximately 2.3 percent in 2009, and the months' supply of inventory has risen from 18.7 months to 41.1 months during the same period.

Here in Chicago's Northwest Suburbs - Luxury Homes are sitting on the market - despite frequent price drops.  

NAR looked at inventory in the higher price ranges ($750,000 and above) in May, comparing that month's supply with a year earlier. In May 2008 the month's supply was 17.6 months; in May 2009 it was 24.9 months.

In Hawthorn Woods Illinois - just three homes above 700k have sold in the past six months - though there have been 32 closings in the past six months (all below 700k).   There are 37 homes on the market in Hawthorn Woods - 700k and above out of 115 currently active.

In Barrington Illinois - there are 176 homes currently active at 700k and above - while just 27 have closed during the past 6 months.

The high end on the East Coast & West Coast is also suffering..though reportedly people are coming back into the market looking for bargains..

As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area - covering both downtown and many Chicago suburbs. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS!

If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on YOUR side – looking out for your best interests.

Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. We show more types of properties. Besides all MLS listed properties by any company - we show for-sale-by-owner, short-sale and foreclosure properties, properties that aren't advertised, and much more.

If You Become our Client - You Can Be Assured That We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....(Not a "Salesperson")

Best of All - You are Nothing Out of Pocket to Us For Our Services...

If you have excellent credit and are thinking about buying a home between $250,000 to $2 million in the Chicago Illinois area during the next 60-90 days:

I haven't posted here in awhile - since I've been swamped all summer with a large amount of home buyer clients (that are smart enough to seek out the best representation for buyers (we are unique in that we never represent sellers) and best RE negotiator in the Chicago area w/no dual agency conflicts of interest.)  

Interestingly - most of our clients are very analytical. Why?  Thay analyzed what the best form of representation for buyers is in Real Estate - Exclusive Buyer Agency (meaning the agent and their company never represents sellers - ever)   They read about it in Consumer Reports, Money Magazine, Suze Orman, Kiplinger's Personal Finance, the WSJ, etc.

So now - legislators are talking about extending the home buyer tax credit.  More than 1.4 million Americans have already claimed the new tax credit for first-time home buyers, according to a report from the Internal Revenue Service.  So - the uptick in housing was entirely artificially created....

While a new credit may continue to artificially boost sales - I see it as a bad idea and a waste of the taxpayers money.  Just let the market be the market.   Things adjust - an equilibrium is established - and then things turn.

This goverment rebate to buyers - ironically - just delays a housing recovery...

Senator Isakson, a former real estate broker - has become a leading voice on housing market issues, had introduced his own bill several weeks ago. That would  extend the credit for a year - and would allow all homebuyers, not just first-timers, to claim it, as long as the property is for a principle residence. The bill would also increase the tax refund to as much as $15,000.

The house bills all extend the deadline through at least the end of December 2009 and two of the bills, introduced by Howard Coble, R-NC and by Dan Burton, R-Ind., would have it run through 2010. They would also open it up to all homebuyers.

There has already been $14 billion allocated to the program -- and any extension would surely cost billions more. Finding that money may be very difficult. 

The current credit applies to sales as of January 2009, is good for 10% of the price of a home, up to $8,000, and supporters assert it has helped stabilize the housing market (which it has).   It's available to anyone who has not owned a home for three consecutive years prior to purchase, and to qualify for the full credit buyers must be purchasing a primary residence, and couples can earn no more than $150,000, while individuals must make less than $75,000.

The credit has been an important stimulus tool for two reasons. It's fully refundable, meaning that even if buyers owe no taxes whatsoever, they'll get an $8,000 check from the IRS. And this refund will put money in consumers' pockets for good, as opposed to the $7,500 first-time homebuyer tax credit that could be applied to sales made between April 2008 and July 1 2009.

Buyers must close on their homes before Dec.1. But because much of the recent uptick in home sales has been attributed to this tax credit, housing industry advocates worry that the market could quickly turn down again after the credit expire.

I disagree.  The market will adjust fairly quickly.  Price fixes everything.  Ultimately - it is the market that must adjust. Rates seem to be headed down a bit again - which can only help pricing...  Rates are the key - not artificial props.

___________________________________________________________________________________________________________________________________

As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS!

If you are thinking about buying / purchasing a home in the Chicago Illinois area, you will want to ensure that you have an agent that is on YOUR side – looking out for your best interests.

Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. SEE MORE TYPES OF PROPERTIES - including for-sale-by-owner, short-sale and foreclosure etc. We show ALL listings suiting your needs - from ANY Real Estate company.

If You Become our Client - We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....

Best of All - You are Nothing Out of Pocket to Us For Our Services...

If you have excellent credit and are thinking about buying a home in the Chicago Illinois area during the next 60-90 days:

Fireworks expenditures this year in the Chicago area...

For an entire list of events - you can click here

Happily - some fireworks are also on the 4th - if you don't get your dose on the 3rd...

My company fireworks party is a higher budget this year than last year (as we've had a very good year - with many home buyer clients choosing to use our services - because we are always on their side - without the conflicts of interest that the traditional buyer agents can have... & better negotiation and home buyer service and expertise in general....) - and includes mortars & roman candles.

We spend more than Elburn / Island Lake/

Gurnee and Elgin Illinois combined!  (which is zero this year in those towns!)

Guests see 6 different cities fireworks displays from our office overlooking the lake - with fireworks reflections across the lake...

Sales  of previously occupied homes rose modestly from April to May, the third monthly increase this year, but signs of any housing recovery are fragile at best. 

The National Association of Realtors said Tuesday that home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million last month, from a downwardly revised pace of 4.66 million in April.

Prices, meanwhile, dropped by 16.8 percent from a year ago.

The results missed economists' expectations.

Sales had been expected to rise to an annual pace of 4.81 million units, according to Thomson Reuters.

The median sales price plunged to $173,000 from $207,900 in the same month last year, but up from $166,600 in April.

Hey - and that was when rates were in the 4's.... I imagine the figures will be worse in the future - since rates rose in the past month - but helping keep the momentum going is the 8k tax credit. 

Once that goes away in December - there had better be something else helping housing..

I'm crazy busy now though - with first time homebuyer clients....  They come to me when they want someone who guarantees that I'll always be

on their side.   There are only about 700 of us (Exclusive Buyer Agents) in the USA...... We never rep. sellers.   We are specialists - not generalists - so very good at what we do (home finding, negotiation, getting folks to closing smoothly...)   Buyers come to us - when they want the best....

Off to write up three contracts for purchase..... including a deep discounted (as of yesterday) bank owned one...  :-)

On June 10th, Johnny Isakson, a Senator for the State of Georgia, introduced legislation that would give ALL buyers a $15k tax credit with NO income limitations. Senator Isakson was cited as follows:

“The first-time homebuyer tax credit has made a difference. First-time home buyers used it and the market stabilized, but we don't have a recession in first-time home buyers. We have a recession in the move-up market,” Isakson said. “One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.” --Sen. Isakson--

Information Source:

http://isakson.senate.gov/press/2009/061009housing.htm

I hope this one passes.  Feel free to write your congressmen about it...

Here in the Chicago area - many of my past home buyer clients during the past four months - got into multiple bid situations.   The reason was that I was monitoring bank owned properties that they were interested in - and the bank got sick of holding the property - and all of a sudden - deep discounted the property.  They wanted it of their books. So - we jumped on it.  In one case - since we were the first one to jump on it - they just accepted our bid.

For example a property that was 220k got discounted to 180k - a 40k drop.  Then - four contracts swarmped in. 

I used my background in corporate competitive intelligence (sophisticated interview techniques)  to find out where the other bidders wer at - and then my buyer client out-bid the highest of the four by $2,000.  The bank took our bid - and we won the property.  The appraislal came in way over what the buyer paid.  As part of the deal - I negotiated in to have all of the buyer's closing costs paid.

Roight now - all my clients are first time home buyer clients.  That is where the market is at the moment.  Very few high-end buyers here in Chicago.  Most of the buying is in the 200's-300's...

In other markets, even with foreclosures still looming, bidding wars are occurring.

In Phoenix for example, a large supply of foreclosed families who can no longer qualify for a loan has spurred investor interest to turn as many of these families as possible into rent-paying tenants in the very homes they used to own.

The bidding war is generally from absentee buyers (investor or vacation properties), which currently represents 4 out of 10 homes sold in the Phoenix metropolitan area as of April. This is about double the level experienced for 2007.

Homes that sold originally for $225,000, now have been sold for $80,000-110,000. Great news for the investor, unless the population contracts.

Similar antidotal data appears to be occurring in the California markets of such as Carlsbad, Oceanside and Vista, but only at much higher prices in the $350,000-400,000 range.