Tuesday, November 17, 2009
Budding Signs of Recovery Continue - This Month in Real Estate
Budding signs of recovery continued last month. The encouraging news arrived in a number of closely followed economic indicators. On Thursday, October 29, the U.S. Commerce Department stated the country's recession has officially ended, at least as leading data indicates.
U.S. GDP expanded 3.5 percent in the third quarter, the first period of quarterly growth in more than a year. A strong bounce in housing sales activity in September, mainly due to first-time buyers' efforts to claim the tax credit before it expires for November 30, pointed to stabilization in the housing sector. And more good news this week as an extension and expansion to the Home Buyer Tax Credit made its way through a congressional vote and has officially been signed into law by the President.
The recovery will continue to develop in small steps. The Recent Nobel Prize winner in economics, Paul Krugman, praised the progress, stating the most severe part of the crisis has now subsided and “the end of the world has been postponed.” Moving forward, trade imbalances and mounting levels of government debt, as well as high levels of unemployment, will need to be addressed. For now, governments including the United States will continue to provide stimulus support until the major economies are firmly on solid ground.
THE HOUSING MARKET
Existing Home Sales – Up over 9%
Existing home sales bounced back strongly in September with much of the increase being attributed to the rush of first-time buyers trying to claim the tax credit before the end of this month. Sales jumped 9.4 percent to 5.57 million units over August sales of 5.09 million, marking five gains in the past six months and is 9.2 percent above levels seen last year. Sales activity is at the highest level since July 2007 when sales hit 5.73 million.
Median Home Price
Existing-home price was $174,900 in September, 6 percent higher from its low in January but still 8.5 percent below September 2008. Distressed properties, which accounted for 29 percent of all transactions in September, continue to hold down the median price, as they typically sell for 15-20 percent less than traditional homes.
Inventory – Lowest in 2.5 years
The current housing supply is the lowest seen in two and a half years. Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, representing an 7.8-month supply at the current sales pace, down 16.1 percent from August’s 9.3-month supply. Compared to a year ago, there are now 15 percent fewer homes on the market. According to Lawrence Yun, NAR chief economist, “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”
Mortgage Rates – Close to 5%
Rates for 30-year fixed loans continue to hover around 5 percent. While having risen above the ultra-low 4.78 percent reached in the spring, rates remain at attractive levels for people looking to buy a home or refinance. As an economic recovery is underway and concerns over inflation come back, experts expect mortgage rates will likely go up.
Affordability – Very favorable
Historically high affordability conditions coupled with the first-time buyer tax credit are boosting home sales. Home buyers continue to benefit from low home prices as well as unprecedented mortgage rates. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970,” according to NAR President Charles McMillan. So far this year, the home price-to-income ratio has fallen well below the historical average of 25 percent. The ratio now stands at 15 percent.
Sources: National Association of Realtors, Freddie Mac
Lori Wakefield is a REALTOR with Keller Williams - Lake Travis specializing in West Austin Real Estate - Lake Travis, Lakeway, Westlake, Waterfront and Luxury Homes
U.S. GDP expanded 3.5 percent in the third quarter, the first period of quarterly growth in more than a year. A strong bounce in housing sales activity in September, mainly due to first-time buyers' efforts to claim the tax credit before it expires for November 30, pointed to stabilization in the housing sector. And more good news this week as an extension and expansion to the Home Buyer Tax Credit made its way through a congressional vote and has officially been signed into law by the President.
The recovery will continue to develop in small steps. The Recent Nobel Prize winner in economics, Paul Krugman, praised the progress, stating the most severe part of the crisis has now subsided and “the end of the world has been postponed.” Moving forward, trade imbalances and mounting levels of government debt, as well as high levels of unemployment, will need to be addressed. For now, governments including the United States will continue to provide stimulus support until the major economies are firmly on solid ground.
THE HOUSING MARKET
Existing Home Sales – Up over 9%
Existing home sales bounced back strongly in September with much of the increase being attributed to the rush of first-time buyers trying to claim the tax credit before the end of this month. Sales jumped 9.4 percent to 5.57 million units over August sales of 5.09 million, marking five gains in the past six months and is 9.2 percent above levels seen last year. Sales activity is at the highest level since July 2007 when sales hit 5.73 million.
Median Home Price
Existing-home price was $174,900 in September, 6 percent higher from its low in January but still 8.5 percent below September 2008. Distressed properties, which accounted for 29 percent of all transactions in September, continue to hold down the median price, as they typically sell for 15-20 percent less than traditional homes.
Inventory – Lowest in 2.5 years
The current housing supply is the lowest seen in two and a half years. Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, representing an 7.8-month supply at the current sales pace, down 16.1 percent from August’s 9.3-month supply. Compared to a year ago, there are now 15 percent fewer homes on the market. According to Lawrence Yun, NAR chief economist, “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”
Mortgage Rates – Close to 5%
Rates for 30-year fixed loans continue to hover around 5 percent. While having risen above the ultra-low 4.78 percent reached in the spring, rates remain at attractive levels for people looking to buy a home or refinance. As an economic recovery is underway and concerns over inflation come back, experts expect mortgage rates will likely go up.
Affordability – Very favorable
Historically high affordability conditions coupled with the first-time buyer tax credit are boosting home sales. Home buyers continue to benefit from low home prices as well as unprecedented mortgage rates. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970,” according to NAR President Charles McMillan. So far this year, the home price-to-income ratio has fallen well below the historical average of 25 percent. The ratio now stands at 15 percent.
Sources: National Association of Realtors, Freddie Mac
Lori Wakefield is a REALTOR with Keller Williams - Lake Travis specializing in West Austin Real Estate - Lake Travis, Lakeway, Westlake, Waterfront and Luxury Homes
Tuesday, November 10, 2009
Homebuyer Tax Credit Extended and Expanded!
Homebuyer Tax Credit Extended and Expanded!
Last week, a new Homebuyers Tax Credit bill was signed into law. The bill extends the tax credit for first-time homebuyers (FTHBs), as well as opens it up to current homeowners who are looking to buy. And even if you aren't looking to purchase - pass on this article to anyone you think might be in the market to do so. This is information that might benefit them greatly, and I'll be happy to be of service to them.
Here is a brief overview of the Homebuyers Tax Credit - and its benefits - based on the new bill.
Tax Credit for First-Time Homebuyers
FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Tax Credit for Current Homeowners
The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the timelines available.
What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
Remember, the new tax credit program includes a number of details and qualifications. Call or email today if you have questions or would like to see if you can benefit from the tax credit...and email this article along to anyone else you feel it might benefit as well!
Looking to take advantage of the new tax credit to purchase your next Austin Texas home? Visit our website at http://www.loriwakefield.com/ to search all Austin Texas Real Estate.
Last week, a new Homebuyers Tax Credit bill was signed into law. The bill extends the tax credit for first-time homebuyers (FTHBs), as well as opens it up to current homeowners who are looking to buy. And even if you aren't looking to purchase - pass on this article to anyone you think might be in the market to do so. This is information that might benefit them greatly, and I'll be happy to be of service to them.
Here is a brief overview of the Homebuyers Tax Credit - and its benefits - based on the new bill.
Tax Credit for First-Time Homebuyers
FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Tax Credit for Current Homeowners
The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the timelines available.
What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
Remember, the new tax credit program includes a number of details and qualifications. Call or email today if you have questions or would like to see if you can benefit from the tax credit...and email this article along to anyone else you feel it might benefit as well!
Looking to take advantage of the new tax credit to purchase your next Austin Texas home? Visit our website at http://www.loriwakefield.com/ to search all Austin Texas Real Estate.
Sunday, November 1, 2009
Lake Travis TV
Lake Travis has started its own Internet TV station - LakeTravisTV.com - a Web site featuring video content on local news, high school sports, lifestyle and business information.
You can learn about things to do in the area, weather, the schools, interesting information about Lake Travis, fishing, boating and of course, real estate including features on a few of the neighborhoods in the area. I think it is interesting to see all of this in video form and it high quality.It's a great informative website especially if you are thinking about relocating to the area.
To see homes for sale in the Lake Travis area, visit my website at www.LoriWakefield.com
You can learn about things to do in the area, weather, the schools, interesting information about Lake Travis, fishing, boating and of course, real estate including features on a few of the neighborhoods in the area. I think it is interesting to see all of this in video form and it high quality.It's a great informative website especially if you are thinking about relocating to the area.
To see homes for sale in the Lake Travis area, visit my website at www.LoriWakefield.com
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