New Home Buyer Tax Credit: 4 Things You Need to Know

You know I love to spread good news and you will find that this is NO exception. I hear a lot of talk about how awful the economy is and other complaints about the down side of life. Now I admit we are living in some challenging times. But out of challenge comes inspiration, motivation and great ideas by people who are thinking about what can be done instead of what can’t be done.

One of the exciting things that is happening for first time home buyers is a great way to get some money to help you with that thrilling first home purchase. Time is of the essence because you only have until December 1 2009 to take advantage of the New Home buyers tax credit.

So here are some of the questions that people are asking about the tax credit.

What exactly is 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 home ownership 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.
Is there an income limit and what is it?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. 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 phaseout range for the tax credit program is equal to $20,000. That is, 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.
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. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
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.

This is just one more great reason to buy a home right now. Prices are low, inventory is plentiful and you get a tax break to boot. What a country!!!!! Call your favorite lender for more details on how to get qualified for your new home today.

STOP Buying Real Estate

Accident Velocity sales in real estate is picking up and has had an increasing trend over the last several months; 8 months statewide, to be exact. Prices are still coming down, or showing signs of doing so, but more people are buying. Evidence is clear that people, in general, are more comfortable with the fact that the real estate market is in the toilet, and, in fact, the market isn’t really regarded as being in the “toilet” any longer, but rather just a strong “buyer’s-market”. Deals abound everywhere and sellers, now more than ever, are willing to negotiate on just about everything to hold onto the possibility of selling their property.

So, if you want to miss out on what Trump and Buffet are saying is one of the most lucrative buyer’s markets ever, STOP BUYING REAL ESTATE.

Statewide, and even nationwide trends reflect a positive upward trend in sales velocity, but locally, prices are still coming down, and velocity sales are about the same as last year. However, the overall “feeling” of the market has changed. Talking to a recent real estate purchaser, “I can’t say whether we’re at the bottom or not, but prices are lower than they have been in years, and the price is right for us to purchase and it be worth it to us.” “We’re not looking for a quick turnaround, but we are looking for something that we can use and rent out. . . we’re paying cash, so this is a good place to park money for the next several years,” said another recent real estate buyer.

Although the real estate market in Panama City Beach is proving to be a strong opportunity to buy condos, homes and other real estate with great deals coming on the market almost daily, local trends are not quite the same as the statewide and national trends. “We’re still not seeing any signs of price stabilization,” said a local agent.

In May 2008, 41 existing single family homes sold in Panama City Beach averaging $276,000 or $151 per square foot. In May 2009, 34 existing single family homes sold averaging $226,000 or $116 per square foot – that’s 17% fewer homes sold at 18% less than May 2008. Statewide, velocity sales has increased by a small amount monthly for the last 8 months.

In May 2008, 47 existing condos sold in Panama City Beach averaging $226,000 or $213 per square foot. In May 2009, 45 existing condos sold averaging $199,000 or $181 per square foot – that’s 4% few condos sold at 12% less than May 2008.

Statewide existing home sales rose 18 percent during the month of April with a total of 13,111 homes sold compared to 11,133 homes sold in April 2008, according to FAR. April’s statewide existing home sales were slightly higher than statewide activity in March.

The national median sales price for existing single-family homes in March 2009 was $174,900, down 11.5 percent from a year earlier, according to NAR. In California, the statewide median resales price was $253,040 in March; in Massachusetts, it was $255,000; in Maryland, it was $264,302; and in New York, it was $222,500.

In Florida’s year-to-year comparison for condos, 4,660 units sold statewide compared to 3,862 units in April 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $106,600; in April 2008 it was $178,900 for a 40 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $177,600 in March 2009.

Talking with Jim Free of Jim Free Realty, “There are a lot of cash buyers right now, financing isn’t very easy, but the Florida Association of Realtors is in the process of talking to Fannie Mae about some lending issues that could help.” Many are jumping at this opportunity as interest rates are down, yeilding low returns on investment accounts. The down prices in real estate provide a great place to “park” money and give the buyer something tangible to use. The only quarell is how long will you have to “park” it before you can take it back out with a profit. For those not worried about that, real estate proves to be a great option.

On The Beach Show, the buyers we are working with are mostly looking for fixer-uppers citing that the deals are usually better there and emphasizing a willingness to put a little “elbow-grease” into a purchased property to save money. The Hot Deals that garner the most attention are properties that are super cheap, but require a little work. Some of these homes have been listed as low as $50 per square foot, and proving hte market is hungry for real estate deals like this, most of them are off the market within days of them being made available.

So, if you are a buyer, the story hasn’t changed if you are looking for the best deal out there; you still have to fight for it. If you are a seller, you can sell your property and sell it quick if it is priced super cheap; meaning that the perceived value is significantly lower than other recenly sold properties on the market. If you are an agent, work hard and you’ll be fine. Everyone is looking for that beat up foreclosure that is $50 to $75/foot or that listing where the seller is losing his shirt. Become specialized in finding the right deals for your clients and keep them up to date regularly with a great web site, blog and consistent email notifications. And, follow up, for crying out loud; just because your clients don’t respond, doesn’t mean they aren’t interested, you just haven’t sent them something yet that illicits a response.

How to sell your home during the Holidays

The holiday season offers the perfect opportunity to showcase your home at its sparkling best, especially if you follow a few simple tips.

You only have one opportunity to make a first impression; so, of course, this first impression starts as the potential buyer drives up to your home. Twinkling lights hung neatly on doorways and trees are very attractive and festive, but don’t overdo it. Less is generally more! Leave those inflatable lawn displays in the box this year. Giant bobbing snowmen or Santas on the roof are very cute for the kids, but do nothing to entice buyers to your front door. Opt for a simple, attractive wreath for your door and perhaps some white lights strategically placed on shrubbery in the yard.

Don’t let your Christmas tree take over the living area. The smaller the square feet of the home, the fewer decorations you should use. Keep it simple, not cluttered, with a few decorations and some fresh greenery, like poinsettias and fresh garland. A larger home can handle more decorations and the décor should be a little more elaborate. Most importantly, subtle, yet attractive décor allows the potential buyer to see the warmth of your lovely home during the holiday season.

Enhance that special holiday feeling by playing soft, seasonal background music to set the stage for a showing. Although Jingle Bell Rock and Grandma Got Run Over by a Reindeer may be holiday favorites of yours, soothing music will make that potential buyer think that your home is comfortable and desirable.

Finally, allow the aroma of the holidays to fill your home with delicious scents that make your visitors want to sit at the kitchen table and share a glass of cider. Bake a cake or cookies before a showing so the savory smell lingers in the air…or simply leave a pot boiling with cider or packaged Christmas spices. Place cinnamon sticks in an open jar or include them in a decorative design.

Remember, even though there may be fewer buyers actively looking at this time of year, there are still buyers looking. It only takes one! Use this opportunity to showcase your home at its festive best…and that’s a wrap.

If you have any questions about Staging for the Season, I’d love to hear from you. Let’s look forward to a great 2009!

For more information, please contact Sandy at 850-303-1825 or sandythompson10@comcast.net. You can also visit her websites @ http://www.ringthebelles.com and http://www.sandythompsoncondos.com.

Where we are in the current real estate cycle

MarketWatch.com published a great article speaking into why now may be a good time to buy real estate.

The bottom of the market is not a date, but a band of time or season,” Shore says, and therefore what constitutes the bottom for the entire country is meaningless for those looking to buy and sell homes in their own communities. “If you sit on the fence and wait for the absolute best deal, you could end up literally waiting for years. And most likely, your guess on market timing would be wrong. But if you choose to buy now, you will not only be in the driver’s seat during the buying process, you will also reap the gains of price appreciation once you become a home owner,” adds Shore.

Waiting for the right time to buy puts you at risk of missing it and getting caught in a market on the upswing. Plus, for some first-time buyers, owning simply makes better economic sense than renting. In such areas as Los Angeles, rents are getting close or surpassing a mortgage payment. And you don’t receive any tax benefits from paying rent, nor do you accumulate any price appreciation, as you would if you owned a home of your own.

Continue Reading >> >>

Real Estate Market Conditions on Panama City Beach – September

September 2008 Report – Panama City Beach

Slightly over 4.5 % of the total Beach inventory for detached single family homes sold in September, down from slightly over 5% in August. If all things hold steady, there is over 19 months of inventory on the market. As of Oct 04, 2008 there were 750 DSF listed in the Bay County Association of REALTORS® MLS System for Panama City Beach. Out of the 34 homes that sold in September, 9 were foreclosures, 1 was a short sale, 3 were builder sales and the rest were typical sales. September 08 was 17% slower than August of 08 in total DSF’s sold, 34 compared to 41. The foreclosure rate of sales for detached single family homes on the Beach fell slightly to 26.5% of all the sales for September compared to 30 % in August. The absorption rate decreased slightly from 5% to 4.5% but the overall inventory of DSF also fell from 780 to 750. Out of the 35 homes 1 canal front home sold. There were no other waterfront sales. The average price per square foot was $142, including all 34 homes. However, if we nixed the top and bottom 5 the average price per square foot actually rose to $147.16. The average days on the market for all 34 homes was 206, a 12.5% decrease compared to August, which was 236. As of October 4th there are 66 DSF under contract (about 8.8 %) and 750 listed. This is a 3% improvement over August . These numbers overall are more positive than negative and reflect a slight strengthening. This is no time for elation but any sign of encouragement is welcomed.

2.6 % of the total Beach inventory of condominiums sold in September. This indicates a 38.5 month inventory of condominiums on the Beach and the statistics are basically the same for gulf front condo’s. As of October 6th there were 1582 total condominium listings, 1090 of which are gulf front. Out of the 41 total condominiums that sold in September only 4 were foreclosures (or slightly under 10%), one of which sold at auction, 5 were short sales (about 12 %), the other 78% were conventional sales. If gulf front condo’s were considered alone, all 25 sold for an average of $264.35 per square foot. If all condos are taken into consideration, the average price per square foot slips to $224.42. The average days on market for all condo’s sold is 134 and for gulf front only, 143 . As of October 6th there are 90 condos under contract out of 1582 total for the beach, or slightly over 5.6 %, and out of that there are 40 gulf front out of 1090 listed, a bit less than 3.7%. The numbers in September trended negative for condos. The absorption rate decreased from 3% to 2.6%, the average price per square foot declined for all condos about 9% and for gulf front 9.25%. There were less than half as many foreclosures sold but a significant growth in short sales or pre-foreclosures. The silver lining is that the overall inventory decreased by 38 units.

No inventory for multi-family homes sold in September. There are 65 active listings and 2 under contract as of October 6th.

About 2.6% of attached family homes sold in September for a total of 7 sales out of 266 listings. This leaves about 38 months of inventory on the market. There were 3 foreclosures sold out of the 7 and the average days on market was 88. The average price per square foot was $178.52. There are currently 19 units under contract. This sector of the market, though slipping a bit in absorption rate by about 1%, improved strongly in price per square foot, 22.5%, and decreased in average days on market by 26%. That is the bright spot in the market this month. It ought to be noted, however, the product that sold was a newer product across the board than last month’s sold inventory.

Sold	Listed	Avg DOM	Avg Price/SF	Mo’s of Inv	Abs. Rate	Forcl	Undr Const
Detached Single Family
34	750	206	147.16	19	4.5%	26.5%	66
Condo’s Total Panama City Beach
41	1582	134	224.42	38.5	2.6%	10%	90
Condo’s Gulf Front Only
25	1090	143	264.35	27.7	3.6%		40
Multi-Family
0	65
Attached Single Family
7	266	88	178.52	22.5	2.6%	42%	19

There are some things to keep in mind. One, these are snap shot reports not movies. There can be huge swings month to month which may yield either despair or elation depending on whether there is a sharp increase or decrease.

Second, these reports relate to posted listings and sales in the Bay County Association of REALTORS MLS System. Some sales occur “for sale by owner” or at auction. The average days on market for a property to sell is based upon a selling price that is competitive with the average sale price per square foot of the units that have sold. One must even fine tune it further because the average sales price per square foot that sold ought to be more tailor fit for a particular property based on age, condition, and location.

Buyers should note that there are far more seller-sold deals moving in this market than there are foreclosures. It would be foolish to simply look at foreclosures as de facto, the best deal of all. Many sellers are equally or perhaps more motivated than many of the banks that own property. All of us need to realize that there is simply far too much inventory on the market and both REALTORS® and sellers would do the market a favor if they could pull inventory that is simply overpriced. The only way value will build again is when the absorption rate improves and inventory decreases.

If you’re overpriced now you have very little chance of moving your property. In this market, one should sell only if one must; it is not a wise time to sell if it is discretionary. Buyers should be strongly encouraged by these market conditions.

Guessing the bottom of the market is like guessing the bottom of the stock market. We have been in a three year price correction. Our airport is well underway, we have had major improvements, businesses have come to our area, our property taxes have been lowered, Lord willing we will escape hurricane season with little damage, our election cycle will be soon over, the dollar is beginning to strengthen once again, even insurance rates have been eased in most cases, interest rates are near historical lows and the war is seeming a bit more victorious than defeatist in the most recent months.

All these positives must weigh in against the challenges that we have faced both locally and nationally and we all hope, with good reason, that in fairly short order the momentum will shift and affect our market positively. (The statistics provided above were all true as of September 2008 and were the product of Bay County Association of REALTORS® MLS System.)

Scott Seidler GRI
Broker-Associate
Prudential Shimmering Sands Realty
850-774-5007
ScottAndSonjaRealEstate.com