Real Estate Information Archive

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Consumers making substantial home renovations can receive a tidy tax credit from Uncle Sam if they shop and buy carefully. The American Recovery and Reinvestment Act of 2009 allows home owners to receive tax credits when they improve the energy-efficiency of their home.

Tax credits are different from tax deductions.  A tax credit is figured after you determine your tax bracket and how much you should owe in taxes.  A tax deduction reduces how much you owe in taxes by decreasing your taxable income.  The amount of a tax credit is the same for everyone, while tax deductions are not.

To receive the tax credits, homeowners should make sure their improvements adhere to the IRS guidelines:

 - Must be “placed in service” from Jan. 1, 2009 through Dec. 31, 2010.
 
 - Must be for taxpayer’s principal residence, except for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify).  $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 and 2010 for most home improvements, except for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems, which are not subject to this cap, and are in effect through 2016.

 - Must have a “Manufacturer Certification Statement” to qualify.  For record keeping, save your receipts and the Manufacturer Certification Statement.  Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) - use IRS Tax Form 5695 (2009 version) - it will be available late 2009 or early 2010.

Brought to you by Randy Charlton of Century 21 Home Realtors.

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Historically low interest rates and the extended federal tax credit have helped millions of buyers take advantage of one of the best buyers markets in history. Market conditions have improved considerably with the help of these stabilizing forces. Expect to see continued market activity through the winter and spring as savvy buyers take advantage of the extended $8,000 tax credit. Freddie Mac reports that 30 year conventional loans available in the high-4 to low-5 percent range.

Increased demand has shrunk inventory while slightly raising homes prices. The national median existing home price rose to $178,300 in December, up 1.5 percent over 2008 prices. The increase was attributed in part to an increase in mid- to upper-priced homes.

The reduction of housing inventory has brought stability to many parts of the country, creating more competition for available homes, and multiple offers in some areas.

Brought to you by Randy Charlton of Century 21 Home Realtors.

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As expected, the National Association of Realtors (NAR) reported a decline in existing home sales at the end of 2009, as first time buyers rushed to beat the tax credit deadline and close their transactions by November 30. Although Existing home sales fell by 16.7 percent in December, sales remained brisk enough to break the 5 million unit mark, bringing total the number of existing homes sales up to 5,156,000 for all of 2009. The 2009 sales figures were almost 5 percent higher than the year before, creating first year-over-year sales gain since 2005.

Chief NAR economist Lawrence Yun remains cautiously optimistic about the national housing market. "It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit," he said. 'We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year."

Brought to you by Randy Charlton of Century 21 Home Realtors.

Senators have agreed to extend the $8,000 first-time homebuyer tax credit originally set to expire on November 30. Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The Obama administration has also signaled its strong support for an extension of the tax credit.

Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing primary residence between December 1, 2009 and April 30, 2010. Buyers would have until June 30 to close on their new homes.

There is an $800,000 price limit on all homes eligible for the credit. The income limits for all buyers would rise to $125,000 per year for individuals and $225,000 for married couples. Under the current program, the limits are $75,000 and $150,000 respectively. The first-time homebuyer credit is also available to those who have not owned a home in the previous three years.

The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.

Please be advised that this legislation has not yet passed, but I will be sure to keep you informed as it moves through Congress toward approval. I’m committed to meeting your real estate needs. Call me if you have any questions!

Brought To You By Randy Charlton Of Century 21 Home Realtors.

The Current Market Is Fragile

I just read an article that talked about the current state of the real estate market.  It appears the experts believe we have hit the bottom of the market crash and home prices have shown to be increasing.  The mortgage rates are still at historic lows and the tax credit for first time home buyers appears to be doing it’s job. 

There are still many waiting and hoping that the tax credit will be extended and maybe even increased.  Others are hoping that the tax credit will be offered to all home buyers and not just ‘first time’ home buyers.  The wait to see which bills pass congress will be filled with anxiety. 

There is also the matter of the ARMS loans coming due and the foreclosures that may follow.  The increase in foreclosures could potentially cause home prices to fall again. 

Become informed of the current market and contact a professional before making any real estate decisions.  With the fragility of the market...timing is everything.

Brought To You By Randy Charlton Of Century 21 Home Realtors.

Waiting To Buy Your First Home?

Are you waiting for the perfect time to buy your first home?  You might be staring “the perfect time” in the face.  While we are experiencing and unhealthy economy, the reasons to buy your first home are increasing.  The home prices are low because of the economy, the interest rates are still historically low, and with the First Time Home buyer Tax Credit from the government...the stars are aligning in your favor.

I have heard some say that they still have time since the rumor is that the tax credit which is set to expire on December 1, 2009 will be extended into 2010.  There are many bills under consideration by Congress to extend and increase the Tax Credit, but the likelihood of any of the bills getting enacted this year is highly unlikely.  You could end up playing a game of “Deal-Or No Deal” without even knowing it.  Will there be an increase and extension in the case you pick?  Or should you take the deal and know that it is yours?  In this economy, gambling could prove disastrous. 

There is a great website that could answer any questions you have at http://www.federalhousingtaxcredit.com. You can also check on my website for further information at www.TeamCharlton.com.  For future updates concerning the Tax Credit or anything Real Estate, follow me on twitter at www.twitter.com/RandyCharlton.

Brought To You By Randy Charlton with Century 21 Home Realtors.

The stimulus bill passed in February provides first-time home buyers a tax credit equal to 10 percent of the home's purchase price or  up to $8,000, whichever is less, when they file their taxes. Since then, new  buyers using FHA-insured loans will be allowed to treat the tax credit as additional down payment funds, or use it to pay for the closing expenses. That program was set to expire November 30th.  As it gets closer to that date some consumers trying to come up with the necessary funds may be fearful that time will run out, dashing their dreams of owning their home. With recent improvements in the housing market, declining inventory and other positive metrics, Congress should see the long term value in extending the Tax Credit.

Senate Majority Leader Harry Reid said he expects congress to extend the tax credit  by the end of the year. Reid envisions maintaining the credit at the $8,000 level. He said there has been an effort to make the credit available to those other than first-time homebuyers, but acknowledged that may be a steeper climb.

Do I Hear $15,000?..... Raising The Ante

The Home buyer Tax Credit Act of 2009, introduced by Sen. Johnny Isakson (R-Ga.), would raise the tax break from $8,000 to $15,000, or 10 percent of the home's purchase price, whichever is lower; remove income restrictions - the current credit is available only to households making $75,000 or less - and extend it to all home purchasers, not just first-timers.

Bankers say that increasing the first-time buyer program would go a long way toward stimulating home sales and, in turn, the economy. Jay Brinkmann, the chief economist at the Mortgage Bankers Association, estimates that just upping the tax credit to $15,000 would lead to an additional 400,000 home sales.

I Am Not Buying, What's In It For Me?

This is not only good for first-time buyers but possibly all  homeowners.

1) As first timers move into the market it takes pressure off the resale inventory. To the extent that existing homeowners who want to move up probably have to sell their existing home, this new policy can have a dramatic impact. Recently up to 40% of all home sales have involved first time buyers.

2) See all those foreclosures in your town or subdivision? They are weighing down the value of your home even if you can't see it happening. First-Timers generally buy at the low end of the market and will absorb these abandoned homes.

3) Studies have shown that first-time buyers have a significant impact on the local economy and contribute in other socially positive ways.

4) A thriving resale market helps maintain home prices as they recover from the recent downfall.

Brought to you by Randy Charlton with Century 21 Home Realtors.