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Best And Worst Real Estate Markets For 2010

Admin — Tue, 23 Mar 2010 12:47:32 +0000

CNNMoney.com recently published its 2010 forecast and projections for home prices in the country’s largest metro markets.

Listed as “Top 25″ and also comprehensively by state, CNNMoney.com’s home price forecasts puts Santa Rosa, California at the top of 2010′s home appreciation list and Hanford, California at its bottom.

The 10 cities projected for highest home appreciation in 2010 are:

Santa Rosa, CA : +6.0%
Cheyenne, WY : +4.7%
Kennewick, WA : +4.6%
Merced, CA : +4.4%
Bremerton, WA : +4.2%
Fairbanks, AK : +4.2%
Corvallis, OR : +4.1%
Tacoma, WA : +3.9%
Anchorage, AK : +3.8%
Bend, OR : +3.3%

The Pacific Northwest is the region most heavily-represented among price gainers. The Southeast and Middle Atlantic are most represented on the under-perform list.

However, just because a city’s homes are expected to appreciate (or depreciate) in 2010, that doesn’t mean that every home within its limits will follow suit. Real estate cannot be grouped on a city level like CNNMoney.com tries to. There will always be areas in demand within city limits in which prices rise, just as there will be out-of-demand areas in which prices fall.

Real estate data can’t be grouped by city or even by ZIP code, really. Real Estate Is Local!!!

When we say “real estate is local”, it means that every street in every town has a distinct set of traits that drives its home values. Homes that are one block closer to the train; or, homes that are facing north; or, homes that are made of brick. Each of these characteristics can affect a home’s desirability which, in turn, can affects its sales price.

National surveys can’t capture “essence” like this. They only report on the aggregate. Reports like CNN Money’s are notable, they are fun to read, but they are not good tools for forecasting real estate values. In major metro cities, you might well have homes in the $1MM+ range in the same city as homes in the $50k range. No slight to CNN, but you can’t forecast real estate values when you lump everything by city.

For local real estate data, look to established, publicly available websites and to active, local real estate agents. Both will have data and insight that can help you. National surveys often make for good headlines, but do little to help first time homebuyers find good value.

Home Prices Are Recovering

Admin — Wed, 24 Feb 2010 13:47:19 +0000

The Case-Shiller Index was released Tuesday and shows an improving real estate market. When is a 2.5% loss great news? When it is compared to the 8.7% drop in Q3 of 2009.

According to Case-Shiller representatives, the housing market is “in better shape than it was this time last year,” but some of the summer’s momentum has been lost as many of the markets showed slight declines in value.

What is of note is the markets that didn’t decline — Detroit, Los Angeles, Las Vegas, Phoenix and San Diego. They led the pack in the beginning of the downtown, now they’re leading the charge as the market recovers.

For a first-time homebuyer, this is encouraging news. There are some flaws in the Case-Shiller Index that also need to be considered:

The data has a two-month lag
The sample data is just 20 cities
There is absolutely no such thing as a “national home value”—real estate is local

It is still the most widely used private sector housing index and does do a good job showing broader trends. If housing brought down the economy, the signs are that a full recovery is just around the corner.

Homebuyer Tax Credit Ends in 100 Days

Admin — Wed, 20 Jan 2010 13:47:09 +0000

The expanded version of the home buyer tax credit endThe expanded version of the home buyer tax credit ends on April 30, 2010. To meet the requirements, you must be under contract by April 30th and closed by June 30th. There’s 100 days left to claim it.

You can’t purchase the home from a parent, spouse, or child
You can’t purchase the home from an entity in which they’re a majority owner
You can’t acquire the home by gift or inheritance
All parties to the purchase must meet eligibility requirements

The new law includes some notable updates, however.

First, the subject property’s sales price may not exceed $800,000. Homes sold for more than $800,000 are ineligible. And, also, household income thresholds have been raised to $125,000 for single-filers and $225,500 for joint-filers.

And lastly, don’t forget that the program is a true tax credit — not a deduction. This means that a tax filer who’s eligible for the full $8,00 credit and whose “normal” tax liability totals $5,000 would receive a $3,000 refund from the U.S. Treasury at tax time.

The complete list of qualifying criteria is posted on the IRS website. Review it with a tax professional to determine your eligibility. Then mark your calendar for April 30, 2010.

There’s just 100 days to go.

First Time Homebuyers Loan Options

Admin — Fri, 15 Jan 2010 17:19:56 +0000

The first time homebuyer loan options for 2010 start out looking more attractive by the day.

After watching mortgage rates move higher day after day in December, they’re starting to turn around. Rates hit all-time mortgage lows six times last year, finally setting their best mark right after Thanksgiving. So, while rates had increased nearly .625%, they had only moved up to around 5.25%.

To start 2010, the loan options are beginning to look more attractive. Here’s the cheat sheet what programs to look for:

Less than 3.5% down–Check the state-by-state of loans for first time home buyers.
3.5-5% down–FHA is likely the best option
5% down–
- 740 FICO: Likely going to lean towards Conventional on a single-family home
- 620-679 FICO: Likely going to lean towards an FHA loan on a single-family home
- 680-739 FICO: See the first time home buyer mortgage comparisons
- Condo: See comparisons tagged condo loans

Stay tuned, we’ll have a few new comparisons up next week.

First-Time Home Buyer Tax Credit – Expanded and Extended

Admin — Fri, 06 Nov 2009 07:45:00 +0000

The First-Time Home Buyer Tax Credit program has been extended and expanded.

$8,000 Tax Credit Ends Sooner Than You Think

Admin — Thu, 01 Oct 2009 07:45:00 +0000

The $8,000 First-Time Home Buyer Tax Credit program expires November 30, 2009 — seemingly 60 days from today.

I keep seeing it on blogs, hearing it on CNN, and reading it in the paper.

IRS Releases 10 Facts about the First-Time Homebuyer Credit

Admin — Fri, 18 Sep 2009 07:00:00 +0000

The IRS’ monthly tax tip email was directed at the First-Time Homebuyer Credit. Here’s an excerpt:

Ten Facts about the First-Time Homebuyer Credit

Many taxpayers who purchase a home this year will qualify for an $8,000 federal tax credit. The refundable first-time homebuyer credit is a major tax provision in the American Recovery and Reinvestment Act of 2009. But time is running out to qualify for this credit.
Here are ten things the IRS wants you to know about the first-time homebuyer credit:

To be considered a first-time homebuyer, you – and your spouse if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
You cannot claim the credit before there is a completed sale and purchase of the residence. The sale and purchase are generally completed at the time of closing on the purchase.
To qualify for the credit, the completed purchase must occur before December 1, 2009.
The home must be located in the United States.
The credit is either 10 percent of the purchase price of the home or $8,000, whichever is less.
The amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers.
The credit is fully refundable. A homebuyer with no taxable income, who qualifies for the credit, may file for the sole purpose of claiming the credit and receive a refund. The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed on IRS Form 5405, First-Time Homebuyers Credit.
Taxpayers can claim the credit for a qualified 2009 purchase on either their 2008 or 2009 tax return. For those who have filed a 2008 return, a Form 1040X, Amended U.S. Individual Income Tax Return can be filed in order to get a refund in 2009.
The credit for qualified 2009 purchases does not have to be repaid, as long as the home remains your main home for 36 months after the purchase date.

Qualified taxpayers who have been considering a main home purchase may find extra incentive from this tax credit to buy now so they can complete the purchase before the December 1 deadline.

For more information on this and other key tax provisions of the Recovery Act visit the official IRS Website at IRS.gov/Recovery.

Trendlines For Existing Home Sales Indicate a Housing Recovery

Admin — Tue, 25 Aug 2009 08:45:00 +0000

The housing market continues to beat expectations. Last week, the Existing Home Sales report beat expectations.

An “existing home” is a home sold by an existing owner as opposed to a developer. It’s non-new construction property.

The data from the Existing Home Sales report was noteworthy for its trends:

First Time in 5 Years: Sales volume rose for four straight months
First Time in 4 Years: Sales volume rose year-to-year for the first time in 4 years
First Time in 4 Months: Median home prices fell

Furthermore, first-time home buyers and buyers of “distressed” homes accounted for nearly one-third of the market activity each.

Housing Bottom? Relax, back to Rule #1 of Real Estate: All Real Estate Is Local.

The Existing Home Sales report is not neighborhood-specific. It lumps cities like San Diego and Saint Paul into a giant sample set and fails to account for regional differences in real estate, let alone neighborhood ones. Further, it lumps median prices for solid areas together with the three states that represent 50% of the foreclosure activity.

This is the primary reason why on-the-ground real estate agents are better sources for a market pulse versus a report from any national trade group. You can use Google street view, but it’s not the same as knowing a neighborhood.

Still, the national data isn’t completely useless.

We can still see that ample supply, low mortgage rates, and tax credits are driving home sales. This will eventually drive home prices higher.

$8000 Homebuyer Tax Credit – Looking Back

Admin — Thu, 30 Jul 2009 20:30:33 +0000

The end of the $8000 Homebuyer Tax Credit is getting closer

Only 148 shopping days until Christmas, only 60 shopping days left under the $8,000 First-Time Homebuyer Tax Credit. With that in mind, a few posts from my blog history.

The first one is funny. With all the changes in the homebuyer tax credit, you can’t blame anyone for being confused.

The latter, about the $8,000 Tax Credit up-front explains some general terms. We’ll be announcing some information about our participation with the IHDA $8,000 Tax Crediteither before the weekend or on Monday.

$8000 Home Buyers Tax Credit: What We Currently Know – “It’s $15000. No wait, it’s $8000. Or is it $7500? It has to be paid back. No it doesn’t! Yes, it does! It’s only for first time home buyers. Nuh uh!” That’s about what the conversation sounds like if you are trying to figure out what …
Using the $8000 First Time Homebuyers Tax Credit as a Down Payment … – I was going to write about the recent changes announced by the FHA that allow the $8000 first time homebuyers tax credit to be used to offset some costs in a home purchase (as opposed to waiting to get the $8K at tax refund time). …

First-Time Homebuyer Credit Deadline Fast Approaching

Admin — Fri, 17 Jul 2009 09:00:00 +0000

The First-Time Home Buyer Tax Credit expires December 1, 2009. What does this mean for a potential homebuyer? Get movin’.

Assuming a 60-day window between contract and closing, there is a 77-day window to identify the home, negotiate a price, and execute a contract. Thinking short-sale? You have 13 minutes to get that first offer out.

The First-Time Home Buyer Tax Credit refunds up to $8,000 at Tax Time for qualified home buyers. Key qualification criteria include:

Home buyer must not have owned a primary residence in the past 36 months
The home may not be purchased from a family member
The household adjusted gross income must be below $95,000 for single tax filers and $170,000 for joint tax filers

The tax credit itself is limited to $8,000 or 10% of the purchase price, whichever is less.

Remember, though: The refund is a true tax credit — not a deduction. This means that a taxpayer owing $8,000 to the IRS and claiming the $8,000 First-Time Home Buyer Tax Credit would owe the IRS nothing on April 15, 2010.

The complete list of qualifying criteria is posted on the IRS website.

Other Articles You Might Enjoy:

TREAS Financial and Activity Report – IRS: Issued a General ARRA Podcast in English, Spanish and ASL for the First Time Homebuyer Credit (Section 1006), Automobile Sales Tax (Section 1008), and the College 529 Plan (Section 1005); IRS: Issued Tax Tips on Sales Tax Deduction …
Treasury Department Touts Expanded Tax Credit for First-Time … – In 2008, nearly one out of every two homebuyers were buying for the first time, and the expansion in the first-time homebuyer credit will make it easier for first-time home buyers to enter the housing market this year. …
First-Time Homebuyer Credit | Tax Relief Expert,IRS Tax Help,IRS … – IRS has posted a number of questions and answers (Q homes purchased in 2008; homes purchased in 2009; and scenarios. …