Real Estate Information

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

For more information:http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

The number of homes for sale nationwide was down 4.8 percent from November, according to data from ZipRealty Inc., which measured sales in the 27 major metropolitan areas where it does business.

The decline is typical, says research firm Zelman & Associations. Zelman says for the last 27 years nationwide listings have declined an average of 11 percent in December compared to November.

Zip’s figures don’t cover New York City where appraisal firm Miller Samuel Inc. says the number of co-ops and condos on the market in Manhattan in December was down 11 percent from November.

Source: The Wall Street Journal, James R. Hagerty (01/07/2010)

Selling a home in the dead of winter might seem ill-advised, particularly considering the state of the economy, but some experts think that making the decision to wait until spring to list the property could be a mistake.

Government incentives will likely have a big impact in 2010, with many buyers determined to sign a contract before the April 30 tax credit deadline.

“This year, we're anticipating sales will peak earlier,” says Nicole Hall, editor in chief of Lendingtree.com, an online mortgage comparison service. “The best time to get your house on the market will be February or early March, and maybe even earlier if you want to avoid competition.”

Traffic on real estate Web sites begins to rise right after the New Year, says Ken Shuman, spokesman for real estate Web site Trulia.com.

Source: Forbes.com, Francesca Levy (12/24/2009)

http://www.realtor.org/RMODaily.nsf/pages/News2010010604?OpenDocument

Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit. However, it remains comfortably above the level from a year ago, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 16 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.

Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”

Buyers who have a contract in place to purchase a primary residence by April 30 have until June 30 to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

By Region

• The PHSI in the Northeast dropped 25.7 percent to 74.4 in November but is 14.7 percent above a year ago.
• In the Midwest the index fell 25.7 percent to 82.0 but is 9.2 percent higher than November 2008.
• Pending home sales in the South fell 15.0 percent to 97.8, but are 14.7 percent higher than a year ago.
• In the West the index declined 2.7 percent to 124.6 but is 21.4 percent above November 2008.
  

Interest Rates Likely to Go Higher
Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit, in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.

“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job-growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

Source: NAR
http://www.realtor.org/RMODaily.nsf/pages/News2010010501?OpenDocument

Some real estate researchers are forecasting that home prices will fall again in 2010.

· Fiserv Lending Solutions, a financial analytics firm, predicts that prices will decline an average of 11.3 percent in 342 of the 381 markets it covers.

· Moody’s Economy.com foresees another 8 percent drop, with Arizona, California, Florida, and Nevada feeling even more pain.

· Shari Olefson, author of Foreclosure Nation: Mortgaging the American Dream, predicts a national average decline in prices of about 10 percent in 2010.

· Peter Schiff, president of Euro Pacific Capital and the most bearish of the bears, says real estate prices could possibly fall another 30 percent before they hit bottom.

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun sees it all differently. He predicts home prices will rise more than 3 percent in 2010.

"The headwind we face is rising mortgage interest rates," Yun says, "but the compensating factors will be the home buyers tax credit in the first half of the year and increased job creation in the second half."

Source: CNNMoney.com, Les Christie (01/01/2010)

Money magazine examined its list of the top 100 Best Places to Live and identified these 10 towns where the living is easy and the unemployment rate is far below the 10 percent national average:

1. Cass County, N.D, 3.4 percent unemployment
2. Madison County, Neb., 3.9 percent
3. Platte County, Neb., 4 percent
4. Sarpy County, Neb., 4.7 percent
5. Dallas County, Iowa, 4.7 percent
6. Grafton County, N.H., 5.1 percent
7. Dane County, Wis., 5.2 percent
8. Boulder County, Colo., 5.3 percent
9. Roanoke County, Va., 5.6 percent
10. Saline County, Ark., 5.7 percent

Source: CNNMoney.com (12/29/2009)

Applying for a mortgage modification and being in a months-long trial period can devastate a home owner’s credit score.

Under the government plan, troubled borrowers can have their mortgage payments reduced to 31 percent of their pre-tax income. They are first put in a trial modification for several months to test whether they can meet the requirements of the new mortgage.

Borrowers who were previously current on their mortgages will see their FICO scores fall about 100 points while they are in the trial period, according to the Treasury Department. Borrowers who were previously late or missed payments will see their scores fall more, the government says.

The longer a borrower is in the trial period, the greater the impact on their credit scores, Once the modification is approved, the borrowers’ mortgage credit status will be listed as current and that should improve their scores, the Mortgage Bankers Association explains.

Even so, the delinquency remains on credit reports for up to seven years and can make getting credit for something else like a car difficult and expensive, borrowers report.

Source: CNNMoney.com, Tami Luhby (12/28/2009)

Remodeling and decorating trends in 2010 are likely to reflect the fact that many home owners are settling in for the long haul.

Here are some ideas for updating homes and gardens from decorators and leading real estate practitioners:

• Environmentally sensitive furniture. Natural fibers, sustainable woods, and recycled products are key to attracting environmentally concerned buyers.
• Classic neutral colors. Deep gray browns and gray blues, muted beige, and chalky white will be particularly popular shades, Pittsburgh Paints predicts.
• Backyard gardens. First Lady Michelle Obama led the way in 2009 when she installed one at the White House.
• Backyard living. Wood-deck additions offer an 80.6 percent payback, according to the annual Cost vs. Value Report from Remodeling magazine and REALTOR® magazine. Simple fire pits and outdoor fireplaces also will be popular, trend-watchers say.
• Made in America. As more people feel compelled to support local employment, U.S. manufactured products and antiques will become more popular, says Patricia Shackelford, author of design blog, Mrs. Blandings.

Source: Orlando Sentinel, Jean Patteson (12/26/2009) and Kansas City Star, Stacy Downs (12/27/2009)
http://www.realtor.org/RMODaily.nsf/pages/News2009122805?OpenDocument

You will love this very well maintained 4 bedroom, 3 bath home in Hawthorne Hills Subdivision. Features include a convenient floor plan with spacious bedrooms. Updates include a new radon system, all new kitchen appliances, a whole house water filtration system, freshly painted living room, dining room, kitchen, master bedroom and baths. Large 16 x 10 deck has been restained. Enjoy the 16 x 14 patio off the den/office. A/C new in 2005. This home is move-in ready! Taxes reflect both tax I.D. numbers.  Only $164,000!

Call the Jodi Lemkemann Team Today!  309.303.1000