I think we hit bottom in February and things are turning around--finally. Are you in a position to buy a home in 2009? My guess is that 2009 will go down in history as one of the best years of all-time to buy a home. I did. Will you?
Thursday, March 26, 2009
Recovery in Sight?
Is a housing recovery in sight? No one has a crystal ball, but there are some very strong signs pointing in that direction. Such as: 1) Home sales were up 5.1% in February, which is the largest single month increase on record, 2) Housing inventory is going down and is below 6 months of inventory in many areas of Indy, 3) Many homes are receiving multiple offers, 4) Many homes are selling in under 30-days, especially in Carmel, IN, 5) Buyer activity is WAY up for most real estate agents, 6) Showings for listings are increasing significantly, 7) Many buyers are asking about the $8,000 first-time homebuyer tax credit and the record low interest rates.
Friday, March 06, 2009
Foreclosure Information
Excerpted from Real Trends Newsletter-March 6, 2009
Mortgage rates hold steady
Fannie Mae/Freddie Mac launch new initiatives
11% of homeowners in mortgage trouble
Mortgage rates hold steady
A lousy week on Wall Street didn't have much effect on mortgage rates, according to Bankrate.com. Stock prices fell to 12-year lows. Normally, a giant slide on stock prices is met by a plunge in mortgage rates-not this time. The benchmark 30-year, fixed-rate mortgage was unchanged, at 5.41 percent, according to the Bankrate.com national survey of large lenders. Source: Bankrate.com
Fannie Mae/Freddie Mac launch new initiatives
Two new initiatives from Fannie Mae-Home Affordable Refinance and Home Affordable Modification-are now available to its servicers and borrowers as part of the Obama Administration's "Making Home Affordable" program. The two initiatives hope to significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that is affordable now and into the future. For more details about the programs, goto http://www.fanniemae.com/homepath/homeaffordable.jhtml Freddie Mac launched its new REO Rental Initiative giving qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. Freddie Mac also will continue to suspend all eviction actions until April 1, 2009 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.
11% of homeowners in mortgage trouble
Over 11 percent of all American homeowners are either delinquent or in foreclosure, according to a report from the Mortgage Brokers Association (MBA). The percentage of mortgage borrowers at least one month behind in their payments-but not in foreclosure -rose to nearly 8 percent during the fourth quarter of 2008, according to the MBA National Delinquency Report. That is the highest rate of delinquency ever recorded by the survey, which began in 1972, and reflects a record 13 percent jump compared to the third quarter. The number of homes in the foreclosure process rose to 3.3 percent, an increase of 0.33 percentage points from the quarter before and up 1.26 percentage points from a year earlier. That represents nearly 1.5 million homes at risk of sliding all the way through foreclosure. Combined, the number of frequencies and loans in foreclosure came to 11.18%, the highest ever recorded by the MBA.
Mortgage rates hold steady
Fannie Mae/Freddie Mac launch new initiatives
11% of homeowners in mortgage trouble
Mortgage rates hold steady
A lousy week on Wall Street didn't have much effect on mortgage rates, according to Bankrate.com. Stock prices fell to 12-year lows. Normally, a giant slide on stock prices is met by a plunge in mortgage rates-not this time. The benchmark 30-year, fixed-rate mortgage was unchanged, at 5.41 percent, according to the Bankrate.com national survey of large lenders. Source: Bankrate.com
Fannie Mae/Freddie Mac launch new initiatives
Two new initiatives from Fannie Mae-Home Affordable Refinance and Home Affordable Modification-are now available to its servicers and borrowers as part of the Obama Administration's "Making Home Affordable" program. The two initiatives hope to significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that is affordable now and into the future. For more details about the programs, goto http://www.fanniemae.com/homepath/homeaffordable.jhtml Freddie Mac launched its new REO Rental Initiative giving qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. Freddie Mac also will continue to suspend all eviction actions until April 1, 2009 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.
11% of homeowners in mortgage trouble
Over 11 percent of all American homeowners are either delinquent or in foreclosure, according to a report from the Mortgage Brokers Association (MBA). The percentage of mortgage borrowers at least one month behind in their payments-but not in foreclosure -rose to nearly 8 percent during the fourth quarter of 2008, according to the MBA National Delinquency Report. That is the highest rate of delinquency ever recorded by the survey, which began in 1972, and reflects a record 13 percent jump compared to the third quarter. The number of homes in the foreclosure process rose to 3.3 percent, an increase of 0.33 percentage points from the quarter before and up 1.26 percentage points from a year earlier. That represents nearly 1.5 million homes at risk of sliding all the way through foreclosure. Combined, the number of frequencies and loans in foreclosure came to 11.18%, the highest ever recorded by the MBA.
Thursday, March 05, 2009
The Credit Crisis Explained
Take a look at this very good, non-biased, straight-forward explanation of how we got into this credit mess we now face. It is very interesting:
http://www.crisisofcredit.com
http://www.crisisofcredit.com
Friday, February 27, 2009
Indianapolis Ranked Nation's Most Affordable City...Again!
Indianapolis and New York City bookend the most affordable-least affordable list. Lower homes prices and interest rates fail to push sales higher.
By Les Christie, CNNMoney.com staff writer, Last Updated: February 23, 2009: 2:17 PM ET
NEW YORK (CNNMoney.com) -- Crashing home prices have led to the most affordable housing market in at least five years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index released Thursday.
More than 60% of all U.S. homes sold during the last three months of 2008 were affordable - meaning that a family making the national median of $61,500 a year would pay 28% or less of their total income toward housing expenses.
At 62.4% affordable, the figure is up considerably from 56.1% in the previous quarter and 46.6% at the end of 2007, according to the report.
Topping the list of most affordable U.S. metro areas, which ranks areas with more than 500,000 in population, was Indianapolis. This is the city's 14th consecutive quarter in first place; it boasts a full 93% of all homes sold being affordable to median family households.
The least affordable was the New York City metro area, where only 13.9% of homes sold met the criteria.
In the fourth quarter, the national median home price fell to $190,000 from $205,700 in the previous-year period, according to a report issued last week by the National Association of Realtors. That combined with falling mortgage rates has made home buying the most affordable it has been since early 2002.
"Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008," NAHB Chairman Joe Robson, a homebuilder from Tulsa, Okla., said in a prepared statement.
That still wasn't enough to get moribund housing markets moving again. Existing homes sold at an annualized rate of 4.74 million in December, according to the National Association of Realtors, down from more than 7 million during the boom.
And a government report revealed that new home sales crashed to an annualized rate of 331,000 in December, the lowest since record keeping began in 1963.
"Worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines," Robson said. Still no buying push
That affordability has improved so much does not necessarily make people go house hunting, according to Mike Larson, a real estate analyst with Weiss Research.
"You could argue that house affordability indexes are improving but that may not be the best way of defining whether it's a good time to buy," he said. "Concerns about the economy and whether they're going to still have a job have kept many homebuyers from stepping up to the plate."
During the boom, when house affordability plunged, buyers came out in droves. They were confident in the economy and afraid that home prices would soar out of reach. Today, just the opposite applies.
"Affordability is going to get even better," said Larson. "Home prices are not done falling. Buyers recognize this. There's no sense of urgency, and rightly so."
Indeed, according to Nicholas Retsinas, director of Harvard University's Joint Center for Housing Studies, affordability, which was a major factor in homebuying during the boom, no longer matters very much. In most parts of the United States, affordability has returned to where it was in 2002 or 2003.
"The new barrier is willingness to buy," he said.
That's why one major goal of President Obama's housing-rescue plan involves slowing foreclosures to stabilize housing markets and foster consumer confidence.
"If that happens, maybe people will start thinking, 'Hey, maybe prices won't go down tomorrow,'" said Retsinas.
Most and least affordable
Affordability in Indianapolis, the 33rd largest metro area in the United States with 1.7 million people, was buoyed by fairly high median income of $65,100 and rock-bottom home prices. The median price for a home sold during the quarter was just $103,000, according to the National Association of Home Builders report.
Those prices, combined with reasonable mortgage interest rates, make home-buying in the area a snap. A buyer of a median-priced home putting 20% down would pay only about $450 a month in mortgage expenses.
But even though house buying costs are reasonable, the city's weakening economy meant it did not escape the foreclosure plague. More than 20,000 homes, representing nearly 3% of the city, received a foreclosure filing of some kind in 2008, the 26th highest rate in the nation.
Other most affordable towns were: Warren, Mich. (89.6%); Youngstown, Ohio (89.4%); and Detroit (89.3%).
In the New York City metro area, home prices took a steep dive during the quarter, to $455,000 from $500,000 three months earlier. But even that was not enough to dislodge the city from its rank as the most unaffordable metro area in the land.
Median income in the area is $63,000, less than in Indianapolis and, with home prices more than four times higher than in the Midwestern metropolis, only 13.9% of the homes sold there were affordable to median income families.
That was still a major improvement from two years ago, when only 5.1% of homes sold during the fourth quarter of 2006 were affordable. And New York households have been barely brushed by foreclosure so far with only 0.71% receiving some kind of foreclosure filing during 2008.
Other least-affordable metro areas included San Francisco at 20.6%, where affordability improved greatly from 5.7% during the second quarter of 2007; suburban Long Island, where 25.5% were affordable; and Los Angeles, where 26.9% were.
By Les Christie, CNNMoney.com staff writer, Last Updated: February 23, 2009: 2:17 PM ET
NEW YORK (CNNMoney.com) -- Crashing home prices have led to the most affordable housing market in at least five years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index released Thursday.
More than 60% of all U.S. homes sold during the last three months of 2008 were affordable - meaning that a family making the national median of $61,500 a year would pay 28% or less of their total income toward housing expenses.
At 62.4% affordable, the figure is up considerably from 56.1% in the previous quarter and 46.6% at the end of 2007, according to the report.
Topping the list of most affordable U.S. metro areas, which ranks areas with more than 500,000 in population, was Indianapolis. This is the city's 14th consecutive quarter in first place; it boasts a full 93% of all homes sold being affordable to median family households.
The least affordable was the New York City metro area, where only 13.9% of homes sold met the criteria.
In the fourth quarter, the national median home price fell to $190,000 from $205,700 in the previous-year period, according to a report issued last week by the National Association of Realtors. That combined with falling mortgage rates has made home buying the most affordable it has been since early 2002.
"Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008," NAHB Chairman Joe Robson, a homebuilder from Tulsa, Okla., said in a prepared statement.
That still wasn't enough to get moribund housing markets moving again. Existing homes sold at an annualized rate of 4.74 million in December, according to the National Association of Realtors, down from more than 7 million during the boom.
And a government report revealed that new home sales crashed to an annualized rate of 331,000 in December, the lowest since record keeping began in 1963.
"Worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines," Robson said. Still no buying push
That affordability has improved so much does not necessarily make people go house hunting, according to Mike Larson, a real estate analyst with Weiss Research.
"You could argue that house affordability indexes are improving but that may not be the best way of defining whether it's a good time to buy," he said. "Concerns about the economy and whether they're going to still have a job have kept many homebuyers from stepping up to the plate."
During the boom, when house affordability plunged, buyers came out in droves. They were confident in the economy and afraid that home prices would soar out of reach. Today, just the opposite applies.
"Affordability is going to get even better," said Larson. "Home prices are not done falling. Buyers recognize this. There's no sense of urgency, and rightly so."
Indeed, according to Nicholas Retsinas, director of Harvard University's Joint Center for Housing Studies, affordability, which was a major factor in homebuying during the boom, no longer matters very much. In most parts of the United States, affordability has returned to where it was in 2002 or 2003.
"The new barrier is willingness to buy," he said.
That's why one major goal of President Obama's housing-rescue plan involves slowing foreclosures to stabilize housing markets and foster consumer confidence.
"If that happens, maybe people will start thinking, 'Hey, maybe prices won't go down tomorrow,'" said Retsinas.
Most and least affordable
Affordability in Indianapolis, the 33rd largest metro area in the United States with 1.7 million people, was buoyed by fairly high median income of $65,100 and rock-bottom home prices. The median price for a home sold during the quarter was just $103,000, according to the National Association of Home Builders report.
Those prices, combined with reasonable mortgage interest rates, make home-buying in the area a snap. A buyer of a median-priced home putting 20% down would pay only about $450 a month in mortgage expenses.
But even though house buying costs are reasonable, the city's weakening economy meant it did not escape the foreclosure plague. More than 20,000 homes, representing nearly 3% of the city, received a foreclosure filing of some kind in 2008, the 26th highest rate in the nation.
Other most affordable towns were: Warren, Mich. (89.6%); Youngstown, Ohio (89.4%); and Detroit (89.3%).
In the New York City metro area, home prices took a steep dive during the quarter, to $455,000 from $500,000 three months earlier. But even that was not enough to dislodge the city from its rank as the most unaffordable metro area in the land.
Median income in the area is $63,000, less than in Indianapolis and, with home prices more than four times higher than in the Midwestern metropolis, only 13.9% of the homes sold there were affordable to median income families.
That was still a major improvement from two years ago, when only 5.1% of homes sold during the fourth quarter of 2006 were affordable. And New York households have been barely brushed by foreclosure so far with only 0.71% receiving some kind of foreclosure filing during 2008.
Other least-affordable metro areas included San Francisco at 20.6%, where affordability improved greatly from 5.7% during the second quarter of 2007; suburban Long Island, where 25.5% were affordable; and Los Angeles, where 26.9% were.
First-Time Homebuyer Tax Credit Form
Looking for the IRS Tax Form 5405 to include the First-Time Homebuyer Tax Credit? E-mail me at Steve@Welcome2Indy.com and I'll send you the .pdf.
Homebuyer Tax Credit Further Explained
The following is information Lisa Hammond of Landmark Title (my favorite title company!) found through the Active Rain website:
"Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments."
WITHHOLDING EXAMPLES:
Note: The impact of estimated tax payments would be the same.
Situation 1: Sally plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit.
Result: Sally's withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000.
Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit.
Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 - $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200)
Situation 3: Charlie and Mary both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 - $5000). They also qualify for the $8000 first-time homebuyer tax credit.Result: Charlie and Mary have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 - $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.
"Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments."
WITHHOLDING EXAMPLES:
Note: The impact of estimated tax payments would be the same.
Situation 1: Sally plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit.
Result: Sally's withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000.
Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit.
Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 - $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200)
Situation 3: Charlie and Mary both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 - $5000). They also qualify for the $8000 first-time homebuyer tax credit.Result: Charlie and Mary have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 - $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.
Wednesday, February 18, 2009
Put the MLS on your cell phone
PUT THE MLS ON YOUR CELL PHONE AND IN YOUR POCKET
CENTURY 21 Realty Group has GONE MOBILE - CALL - CLICK or TEXT
Get ALL homes for sale 24/7/365 Anywhere - Anytime
Instructions to Download Application
Simply go to http://www.GoRealtyGroup.com or http://www.thinkrealtygroup.com
Click on the "Go Mobile" Application IconDownload our new "Go Mobile" Application to your phone
(Note: If your phone is not currently available, check back -- all will be available in 90 to 120 days)
CENTURY 21 Realty Group has GONE MOBILE - CALL - CLICK or TEXT
Get ALL homes for sale 24/7/365 Anywhere - Anytime
Instructions to Download Application
Simply go to http://www.GoRealtyGroup.com or http://www.thinkrealtygroup.com
Click on the "Go Mobile" Application IconDownload our new "Go Mobile" Application to your phone
(Note: If your phone is not currently available, check back -- all will be available in 90 to 120 days)
Tuesday, February 17, 2009
Details on New Homebuyer Tax Credit
First-Time Home Buyer Tax Credit FAQ'S
Congress Enacts Bigger and Better Home Buyer Tax Credit
Provided Courtesy of CENTURY 21 Realty Group February 17, 2009, 4:57 PM
A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Are there any income limits for claiming the tax credit?
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit. For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009. In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.
I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
For further information click on this link: http://www.federalhousingtaxcredit.com/2009/faq.php
Congress Enacts Bigger and Better Home Buyer Tax Credit
Provided Courtesy of CENTURY 21 Realty Group February 17, 2009, 4:57 PM
A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Are there any income limits for claiming the tax credit?
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit. For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009. In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.
I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
For further information click on this link: http://www.federalhousingtaxcredit.com/2009/faq.php
Monday, February 16, 2009
The 'New' Homebuyer Tax Credit
OK, there is now a new homebuyer tax credit just passed by Congress and signed into law by the President on Monday. It is $8,000 now and goes from January 1, 2009-December 31st, 2009. It is for first-time homebuyers (someone who hasn't owned a home for at least 3-years) and there are still income limits such as $75,000 for singles and $150,000 for couples. It is a true tax credit meaning you don't have to pay it back, unless you sell your home within 3-years and then you have to pay a portion of it back.
This is yet another reason to buy now, especially if you are a first-time homebuyer. Interest rates are still around 5% for a 30-year fixed conventional mortgage with a credit score of 740+. Sellers are giving great deals and there is plenty of inventory. If you are at all interested in looking into whether your situation is right or not, or if you can qualify for these incentives, please give me a call or e-mail. I'd love to help.
This is yet another reason to buy now, especially if you are a first-time homebuyer. Interest rates are still around 5% for a 30-year fixed conventional mortgage with a credit score of 740+. Sellers are giving great deals and there is plenty of inventory. If you are at all interested in looking into whether your situation is right or not, or if you can qualify for these incentives, please give me a call or e-mail. I'd love to help.
Sunday, February 08, 2009
$7,500 Homebuyer Credit Explained
Have you heard about the $7,500 home buyer tax "credit"? There has been a lot of talk lately about it and with the proposed changes in Congress, it could get even more confusing. Currently, if you purchased a home from April 1, 2008-June 30, 2009, you are eligible for this "credit". There are some stipulations, however:
1. You cannot have owned a home as your primary residence in the past 3 years.
2. You cannot make over $75,000/year if you file your taxes as an individual or $150,000 if filing jointly.
3. This "credit" is in fact a loan--interest-free from the government. It is payable over the next 15-years on your taxes each year in $500 increments. If you sell your house before then, you have to pay the remaining balance back on your next tax return.
That last one is a pretty big difference from just being "given" $7,500 in free money. You get the credit on the next year's tax return and begin paying the following year. It can be a great help to people, but also must be repaid and many people are not a fan of this program as a result. The upside, is it can dramatically help first-time homebuyers afford that first home in time, which may go down in history as one of the best times ever to buy a home.
Congress is tossing around some bills now that would double the credit to $15,000, eliminate the income restrictions, and the 3-year rule, as well as the re-payment requirement. Needless to say, this would be huge to homebuyers.
For more information visit: http://www.federalhousingtaxcredit.com/faq.php
As always, feel free to e-mail or call me with any questions. Good luck in your home search!!
1. You cannot have owned a home as your primary residence in the past 3 years.
2. You cannot make over $75,000/year if you file your taxes as an individual or $150,000 if filing jointly.
3. This "credit" is in fact a loan--interest-free from the government. It is payable over the next 15-years on your taxes each year in $500 increments. If you sell your house before then, you have to pay the remaining balance back on your next tax return.
That last one is a pretty big difference from just being "given" $7,500 in free money. You get the credit on the next year's tax return and begin paying the following year. It can be a great help to people, but also must be repaid and many people are not a fan of this program as a result. The upside, is it can dramatically help first-time homebuyers afford that first home in time, which may go down in history as one of the best times ever to buy a home.
Congress is tossing around some bills now that would double the credit to $15,000, eliminate the income restrictions, and the 3-year rule, as well as the re-payment requirement. Needless to say, this would be huge to homebuyers.
For more information visit: http://www.federalhousingtaxcredit.com/faq.php
As always, feel free to e-mail or call me with any questions. Good luck in your home search!!
Sunday, January 11, 2009
Activity Picking Up
Goodbye 2008 and welcome 2009! I don't think many people are sad that 2008 is behind us. Unfortunately, it holds many records, which no one wanted to see, however 2009 is here most experts are predicting the housing market nationally should have started to recover by 3rd quarter 2009. Indianapolis is still predicted to start its comeback in the spring of 2009.
Personally, I've seen activity marked pick up already this year for the first time since the fall market. Interest rates are lower still with a 30-year conventional fixed rate with no points and 5% down of 4.75% on Thursday of last week.
Clearly, these are unprecedented times. First-time homebuyers are getting unbelievable deals with some of the largest inventory, very motivated sellers, and low interest rates--all at the same time. That is typically unheard of. If you are a first-time home or move-up buyer, this is the time to get in the market and take advantage of a market most-likely none of us will see again.
Personally, I've seen activity marked pick up already this year for the first time since the fall market. Interest rates are lower still with a 30-year conventional fixed rate with no points and 5% down of 4.75% on Thursday of last week.
Clearly, these are unprecedented times. First-time homebuyers are getting unbelievable deals with some of the largest inventory, very motivated sellers, and low interest rates--all at the same time. That is typically unheard of. If you are a first-time home or move-up buyer, this is the time to get in the market and take advantage of a market most-likely none of us will see again.
Friday, December 19, 2008
Interest rates drop again
Thinking of refinancing or even buying a home? Now is probably going to be the time to do it. Even though we have heard many "experts" talk about the federal government artifically lowering them to 4.5%, don't count on it. There is too much debt currently outstanding for that to happen. Most experts agree that interest rates will continue to hover around 5-5.25% for a little while and then maybe trend up slightly. Interest rates are at near historical lows and sellers are giving great deals still. If you are contemplating a refinance or a purchase, this might be the window of opportunity for which you are looking.
Merry Christmas & Happy New Year!!
Merry Christmas & Happy New Year!!
Tuesday, November 25, 2008
Buyers--Come Out, Come Out Wherever You Are!
We need buyers in this market. Interest rates just dropped again today to around 5.50%, which is unbelievable! Inventory is high and sellers are very motivated. In order to get through this housing and economic market slump, we need for houses to start selling again. Short of guaranteeing this, housing WILL come back and be a great investment once more. It is the basis of our economy and always will be.
Mortgage money is still plentiful. As long as you have 3% for a down payment, a steady job, and a respectable debt ratio, you can get a loan. First-time buyers are sitting by the sidelines in numbers never before seen. Generation Y is an even larger generation than the Boomers. We are going to see a huge boom in the housing market, but the question is how long will we have to wait. If you know a buyer who is thinking about buying a home, encourage him/her to talk with a real estate professional and a lender. For every first-time buyer who buys a home, 6-7 additional homes will be sold.
So, if you are thinking about becoming a homeowner, talk with your real estate consultant and see if now truly is the right time for you. My guess is that it will be.
Mortgage money is still plentiful. As long as you have 3% for a down payment, a steady job, and a respectable debt ratio, you can get a loan. First-time buyers are sitting by the sidelines in numbers never before seen. Generation Y is an even larger generation than the Boomers. We are going to see a huge boom in the housing market, but the question is how long will we have to wait. If you know a buyer who is thinking about buying a home, encourage him/her to talk with a real estate professional and a lender. For every first-time buyer who buys a home, 6-7 additional homes will be sold.
So, if you are thinking about becoming a homeowner, talk with your real estate consultant and see if now truly is the right time for you. My guess is that it will be.
Friday, October 17, 2008
What Just Happened?
Just when we start to see a bright spot in the housing market the stock market goes in the dump and we are getting pretty dim reports about the economy as well. What gives? While the stock market around the globe has taken it on the chin lately, there are still some silver linings out there. Houses are STILL selling. That's right, there is still a housing market out there. Depending on where you live, it is in a different state of recovery, but Indianapolis is still looking good.
Dr. Lawrence Yun, Chief Economist of the National Association of REALTORS (NAR) in a presentation in Carmel, IN a couple of weeks ago shared with real estate agents that he, Alan Greenspan and over 800 economists around the US feel the housing market will have begun its recovery by early 2009, if not sooner. Indianapolis' Pending Home Sales Index actually is up for the 2nd straight month and there is evidence of much pent up demand as buyers are waiting on the sidelines for even better deals and the bottoming out of the housing market. Many signs are pointing to Indy being at the bottom now or just pulling out of it.
As long as you have decent credit (650+), 3 1/2% to put down and aren't drowning in debt, there is plenty of mortgage money out there. For FHA, your down payment can even be in the form of a gift letter from a blood relative. Sellers are giving great deals and inventory is going down. Builders are seeing the fewest new home starts in over 60 years. That really helps our housing market.
Dr. Yun predicts that within the next few years there will actually be a shortage of homes on the market turning the tide, once again to a seller's market and homeowners seeing gains in equity once again. If you are a homeowner, are thinking about buying a home or moving up and are planning on staying in your home for at least 5 years, this could be one of the best times in history to buy a home. Interest rates are still very low (6.5% for a 30-year conventional, conforming loan) and sellers are anxious to sell. Take advantage of this historic occasion and if you are considering buying a home, this could be one of the last times to get such favorable conditions--especially from builders who are giving away unbelievable incentives.
Visit www.Welcome2Indy.com for more informationa and resources
Dr. Lawrence Yun, Chief Economist of the National Association of REALTORS (NAR) in a presentation in Carmel, IN a couple of weeks ago shared with real estate agents that he, Alan Greenspan and over 800 economists around the US feel the housing market will have begun its recovery by early 2009, if not sooner. Indianapolis' Pending Home Sales Index actually is up for the 2nd straight month and there is evidence of much pent up demand as buyers are waiting on the sidelines for even better deals and the bottoming out of the housing market. Many signs are pointing to Indy being at the bottom now or just pulling out of it.
As long as you have decent credit (650+), 3 1/2% to put down and aren't drowning in debt, there is plenty of mortgage money out there. For FHA, your down payment can even be in the form of a gift letter from a blood relative. Sellers are giving great deals and inventory is going down. Builders are seeing the fewest new home starts in over 60 years. That really helps our housing market.
Dr. Yun predicts that within the next few years there will actually be a shortage of homes on the market turning the tide, once again to a seller's market and homeowners seeing gains in equity once again. If you are a homeowner, are thinking about buying a home or moving up and are planning on staying in your home for at least 5 years, this could be one of the best times in history to buy a home. Interest rates are still very low (6.5% for a 30-year conventional, conforming loan) and sellers are anxious to sell. Take advantage of this historic occasion and if you are considering buying a home, this could be one of the last times to get such favorable conditions--especially from builders who are giving away unbelievable incentives.
Visit www.Welcome2Indy.com for more informationa and resources
Sunday, September 14, 2008
End in Sight for Housing Slump?
While no one has a crystal ball, there are many indications that the housing slump MAY be nearing its useful life. I have seen showings pick up on listings. I've had several buyers write acceptable contracts on homes. Inventory of houses is going down and so are days on market. John Tucillo a nationally-recognized authority in the real estate market and former National Association of REALTORS chief economist in a speaking engagement for the Indiana Association of REALTORS last Wednesday said that he thought that by the end of this year, Indianapolis should be coming out of the housing slump along with much of the rest of the country. That is great news for homeowners, buyers, and real estate agents.
Along with this prediction, as well as lowering interest rates and the national election, we should have a fairly busy winter. Oddly enough, every time there is a presidential election, the housing market slows considerably in the weeks leading up to it, but then picks up right after the winner is announced. This could end up being a decent 4th quarter.
Visit www.Welcome2Indy.com for some great resources in the housing market.
Along with this prediction, as well as lowering interest rates and the national election, we should have a fairly busy winter. Oddly enough, every time there is a presidential election, the housing market slows considerably in the weeks leading up to it, but then picks up right after the winner is announced. This could end up being a decent 4th quarter.
Visit www.Welcome2Indy.com for some great resources in the housing market.
Saturday, August 02, 2008
Where Are The Buyers?
This is a question I am hearing a lot lately. Sellers are wondering where the buyer traffic is and why they aren't getting many showings. Real estate offices around the city are significantly slower than usual at this time of the year. Agents who work with buyers just aren't seeing many of them.
I ask, "Where are you, buyers?" Interest rates are around 6.5% for a 30-year fixed-rate mortgage. Historically, that is an excellent rate as the 40-year average is over 8.0%. If you are a first-time buyer, NOW is the time to buy. The market is not going to get much better than it is currently. It can't. Jump in with both feet and take advantage of this outstanding buyer's market before it is too late.
If you have a house to sell and are upgrading, more than likely you will get a better deal than you will have to give, further making sense to jump into the market. The real estate market isn't for everyone right now, but with good, solid, objective advice from a good real estate consultant, you can decide if it is the right time for you and, if so, jump in and take advantage of this once in a lifetime real estate market. For information on the market and to assist you with your research, visit www.Welcome2Indy.com.
Good luck!!!
I ask, "Where are you, buyers?" Interest rates are around 6.5% for a 30-year fixed-rate mortgage. Historically, that is an excellent rate as the 40-year average is over 8.0%. If you are a first-time buyer, NOW is the time to buy. The market is not going to get much better than it is currently. It can't. Jump in with both feet and take advantage of this outstanding buyer's market before it is too late.
If you have a house to sell and are upgrading, more than likely you will get a better deal than you will have to give, further making sense to jump into the market. The real estate market isn't for everyone right now, but with good, solid, objective advice from a good real estate consultant, you can decide if it is the right time for you and, if so, jump in and take advantage of this once in a lifetime real estate market. For information on the market and to assist you with your research, visit www.Welcome2Indy.com.
Good luck!!!
Wednesday, May 21, 2008
Economy update
Unless you have been living under a rock for the past 2+ years you know the majority of the real estate market has been going through several challenges lately. In central Indiana alone our market has depreciated 11.3%. Not every neighborhood has seen this kind of depreciation-some have and some haven't. That is why it is critical to speak with a real estate professional to determine exactly what your neighborhood has seen as far as market conditions.
We aren't out of this yet, but the predictions I have seen recently is that the re-sale market is rebounding in the 3rd quarter of this year to as late as the 2nd quarter of next year. New homes are expected to rebound late 2009 or early 2010. Bottom line, with the low interest rates of around 6% and the high inventory of homes in central Indiana (11,000+), there is no better time than now to buy a home. There is a 9.7 month inventory of homes right now. The adage of, "buy low and sell high" clearly applies to buynig a home, too.
Visit our website at www.Welcome2Indy.com for lots of tools to help with your decision-making process and best wishes!
We aren't out of this yet, but the predictions I have seen recently is that the re-sale market is rebounding in the 3rd quarter of this year to as late as the 2nd quarter of next year. New homes are expected to rebound late 2009 or early 2010. Bottom line, with the low interest rates of around 6% and the high inventory of homes in central Indiana (11,000+), there is no better time than now to buy a home. There is a 9.7 month inventory of homes right now. The adage of, "buy low and sell high" clearly applies to buynig a home, too.
Visit our website at www.Welcome2Indy.com for lots of tools to help with your decision-making process and best wishes!
Friday, April 25, 2008
Indianapolis Real Estate Update
Well, the legislature finally got something right. Effective with the 2009, pay 2010 taxes our property tax cap will be in place at 1% of the home's gross assessed valuation. That will save homeowners potentially thousands of dollars each year in taxes and allow many to stay in their home. As a result of the property tax cut, we have a 1% increase in our sales tax to a 7% total sales tax rate. While this isn't a perfect option, it will give the greatest good, in my opinion to people who can be more discretionary in their spending.
This will make many more areas of Indianapolis, especially older homes much more affordable and help to make these homes more attractive to potential buyers.
This is an incredible time to buy a home with near record-low interest rates, lots of inventory, motivated sellers and extremely well-staged homes. The phrase, "buy low, sell high" is very applicable here. If you are even considering buying a home, now is the time to do it as the market is expected to start to balance out the 3rd quarter of this year.
For more real estate information, please visit www.Welcome2Indy.com
Happy house hunting!!
Sunday, March 09, 2008
Negotiating with Builders
OK, we have all heard that builders are hurting right now and that isn't far from the truth. Some are hurting more than others, to be sure. What are your options if you are looking to build a new home or are considering buying a "spec" home (one that is already built or is about finished)? First of all, enlist the help of a knowledgeable real estate agent who is familiar with the building process and builders in the area. There are many nuances with each builder and knowing these could save you (or cost you) a lot of money.
First of all, find out whent the fiscal year of the builder ends, or when their sales quarter ends. They will be under more pressure to sell a home at these times than any other. Enlisting the help of an agent will show the builder you are serious and won't cost you any more. The commission the agent makes comes out of the builer's marketing budget and has nothing to do with the price of the home you are purchasing. You will NOT be able to save more money by bypassing the real estate agent.
Be willing to close quickly. Time is money for builders. A quick close is extremely important to builders. Equally important to builders is buyers NOT making the purchase of their next home contingent upon the sale of their existing home. If you can swing these items you are ahead already.
Most builders will pay your closing costs, but ONLY if you use their lender and title company. Be prepared for some road bumps by using their lender, however this can save you several thousands of dollars.
Next, no matter what the sales rep says, make an offer lower than the price of the home. They will have to take it to the VP of Sales, but he/she will take a look at their bottom-line and tell you whether or not they can accept your terms.
The worst that can happen is they will say no, but this is what we can do. Either way, you are ahead.
Check out our website at www.Welcome2Indy.com for other resources or contact me with any questions. Gook luck!!
First of all, find out whent the fiscal year of the builder ends, or when their sales quarter ends. They will be under more pressure to sell a home at these times than any other. Enlisting the help of an agent will show the builder you are serious and won't cost you any more. The commission the agent makes comes out of the builer's marketing budget and has nothing to do with the price of the home you are purchasing. You will NOT be able to save more money by bypassing the real estate agent.
Be willing to close quickly. Time is money for builders. A quick close is extremely important to builders. Equally important to builders is buyers NOT making the purchase of their next home contingent upon the sale of their existing home. If you can swing these items you are ahead already.
Most builders will pay your closing costs, but ONLY if you use their lender and title company. Be prepared for some road bumps by using their lender, however this can save you several thousands of dollars.
Next, no matter what the sales rep says, make an offer lower than the price of the home. They will have to take it to the VP of Sales, but he/she will take a look at their bottom-line and tell you whether or not they can accept your terms.
The worst that can happen is they will say no, but this is what we can do. Either way, you are ahead.
Check out our website at www.Welcome2Indy.com for other resources or contact me with any questions. Gook luck!!
Monday, January 28, 2008
The Real Estate Market is Back!!
There is no doubt the spring real estate market has made an early appearance!! Yea!! Buyers are surfacing again and sellers are coming out in droves to list their houses. With interest rates at near record lows, inventories at record highs, and pent-up demand, there is no better time to buy a house than in 2008! That's right, this is YOUR year if you are looking to buy a home in or around Indy.
Sellers are still giving great deals and if you have a house to sell as well and are looking to buy another house, you will most likely come out okay since you will probably GET a better deal than you will have to GIVE, especially if you are upsizing.
If you have decent credit, banks and investors still want to lend you their money, so that is not an issue. We should have a resolution to the tax situation in Marion County in the next few months and most economists are predicting 2008 to be the bottoming out of this correction. Indy is predicted to come out of this the 2nd fastest in the nation.
So, get out there, buy a house and get a great deal. This is probably your last chance for a while.
Sellers are still giving great deals and if you have a house to sell as well and are looking to buy another house, you will most likely come out okay since you will probably GET a better deal than you will have to GIVE, especially if you are upsizing.
If you have decent credit, banks and investors still want to lend you their money, so that is not an issue. We should have a resolution to the tax situation in Marion County in the next few months and most economists are predicting 2008 to be the bottoming out of this correction. Indy is predicted to come out of this the 2nd fastest in the nation.
So, get out there, buy a house and get a great deal. This is probably your last chance for a while.
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