Not much impact from repeat buyer credit
It sounded like a great idea three months ago: Hand homeowners a $6,500 tax credit to find a new place to live, giving a thrust of energy to the housing market's recovery.
So far, people are staying put.
In November, the federal government extended a tax credit of up to $8,000 for people who hadn't owned a home for three years. This credit had helped boost home sales last summer and fall. Seeking to build on that momentum, the government added a new credit of up to $6,500 for current homeowners, hoping it would transform them into house-hunters this winter and spring.
But real estate agents around the country say the credit is doing little to elevate sales. Reasons vary.
The unemployment rate is still near 10 percent and consumer confidence is falling. Home prices have stabilized in some markets, but are still a third below their 2006 peak. Droves of people who want to sell are stuck because their home is worth less than they paid for it. Harsh winter weather has Americans shoveling driveways instead of preparing their home for buyer visits.
"No one is saying, 'I need to buy something before it expires,'" said Tim Surratt, an agent with Greenwood King Properties in Houston.
The tax credit for current homeowners was intended to help stabilize prices and bolster the economy, but the housing market remains vulnerable. Sales of both new and previously occupied homes dropped in January, and the Mortgage Bankers Association's index of loan applications recently hit a 12 1/2-year low.
Also, the percentage of current homeowners looking to buy was nearly flat from January to February, according to a poll of 1,500 real estate agents by Campbell Communications and Inside Mortgage Finance.
The Obama administration has pumped billions into the housing market, hoping it will lead the nation out of its economic doldrums. Efforts to modify loans facing foreclosure have largely failed. So, hundreds of thousands of discounted homes will hit the market this year, stressing a market desperate to balance high supply with sluggish demand.
"You've got a really big problem that requires big guns, and the tax credit is just not big enough," said Roberton Williams, senior fellow at the Tax Policy Center in Washington.
Agents believe the credit's true test will come in the spring, the busiest home-buying season. Concerns about high unemployment could keep buyers on the fence.
"If you don't have a job, you're not going to be able to buy a new house," said Deborah Farmer, owner of StarLight Realty in Tampa, Fla.
Another problem is that homeowners, in many cases, will need to sell their current home to afford a new one and claim the credit on tax returns. That's a major issue for borrowers who owe more than their home is worth. Nearly one-in-three homeowners with a mortgage is currently in that situation, according to Moody's Economy.com.
Also, $6,500 may not mean much to a buyer with enough equity to sell a property and afford another home. The savings will hardly dent down payments or moving costs. Most sellers employ real estate agents who typically receive 6 percent of the sales price.
Monday, March 1, 2010
Federal report says that D-FW home prices were up last year
Federal report says that D-FW home prices were up last year
Prices of homes purchased in the Dallas area rose by a smidgen in 2009, according to a federal report released Thursday.
The Federal Housing Finance Agency said that Dallas area home sale prices were up 0.43 percent at the end of last year compared with a year earlier. Nationwide, prices were down 1.2 percent in the same period.
Unlike other home price comparisons, the federal housing study only looks at home purchases financed with mortgages held by Fannie Mae and Freddie Mac – the big government-owned loan investors.
Dallas was one of three top 10 U.S. metro areas that had home price gains in 2009, according to the federal index.
Washington, D.C., had the biggest price increase at 10.55 percent, followed by a 3.71 percent increase in Houston.
Among major cities, the biggest price declines last year were in Miami, down 12.86 percent, and Phoenix, down 12.03 percent, according to the FHFA.
The quarterly federal housing index is different from the recently released Standard & Poor’s/Case-Shiller Home Price Index, which tracks the values of actual houses over time. The Case-Shiller index does not look at new home prices, which are included in the federal price measure.
Case-Shiller said that Dallas-area home prices were up 3 percent at the end of 2009 compared to a year earlier.
Dallas home prices are up about 12 percent during the last five years, the FHFA report said. And since 1991, overall home prices here have risen by more than 74 percent.
The country’s 10 largest home markets averaged a 3.7 percent price drop since 2004, according to the federal index But since 1991, home prices in the top 10 U.S. metro areas are up an average of 96 percent.
Prices of homes purchased in the Dallas area rose by a smidgen in 2009, according to a federal report released Thursday.
The Federal Housing Finance Agency said that Dallas area home sale prices were up 0.43 percent at the end of last year compared with a year earlier. Nationwide, prices were down 1.2 percent in the same period.
Unlike other home price comparisons, the federal housing study only looks at home purchases financed with mortgages held by Fannie Mae and Freddie Mac – the big government-owned loan investors.
Dallas was one of three top 10 U.S. metro areas that had home price gains in 2009, according to the federal index.
Washington, D.C., had the biggest price increase at 10.55 percent, followed by a 3.71 percent increase in Houston.
Among major cities, the biggest price declines last year were in Miami, down 12.86 percent, and Phoenix, down 12.03 percent, according to the FHFA.
The quarterly federal housing index is different from the recently released Standard & Poor’s/Case-Shiller Home Price Index, which tracks the values of actual houses over time. The Case-Shiller index does not look at new home prices, which are included in the federal price measure.
Case-Shiller said that Dallas-area home prices were up 3 percent at the end of 2009 compared to a year earlier.
Dallas home prices are up about 12 percent during the last five years, the FHFA report said. And since 1991, overall home prices here have risen by more than 74 percent.
The country’s 10 largest home markets averaged a 3.7 percent price drop since 2004, according to the federal index But since 1991, home prices in the top 10 U.S. metro areas are up an average of 96 percent.
Monday, January 25, 2010
Repeat Buyers Need to Act Fast to Capitalize on Expanded Tax Credit RISMEDIA, January 23, 2010—By now it is well documented that today’s affordable h
Repeat Buyers Need to Act Fast to Capitalize on Expanded Tax Credit
RISMEDIA, January 23, 2010—By now it is well documented that today’s affordable housing prices, historically low interest rates and federal home buyer tax credit have combined to create one of the most attractive first-time buyer markets in recent memory. What many Americans might not realize is that a recent expansion of the buyer tax credit has created an equally desirable opportunity for existing homeowners.
This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.
“The expanded tax credit offers a great financial opportunity for existing homeowners, particularly those looking to trade up,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independent real estate companies. “Not only can you receive a large sum of money from the government, you’ll also likely purchase your next home for less money and at a lower interest rate than you could have in years past or years to come.”
To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.
There is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, Weichert encourages existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one.
“Typically, it takes three months or longer to sell a home. That’s why it is critical repeat buyers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30 deadline,” added Weichert.
RISMEDIA, January 23, 2010—By now it is well documented that today’s affordable housing prices, historically low interest rates and federal home buyer tax credit have combined to create one of the most attractive first-time buyer markets in recent memory. What many Americans might not realize is that a recent expansion of the buyer tax credit has created an equally desirable opportunity for existing homeowners.
This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.
“The expanded tax credit offers a great financial opportunity for existing homeowners, particularly those looking to trade up,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independent real estate companies. “Not only can you receive a large sum of money from the government, you’ll also likely purchase your next home for less money and at a lower interest rate than you could have in years past or years to come.”
To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.
There is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, Weichert encourages existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one.
“Typically, it takes three months or longer to sell a home. That’s why it is critical repeat buyers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30 deadline,” added Weichert.
Wednesday, December 9, 2009
Tax credit fuels skyrocketing Dallas-area preowned home sales
Tax credit fuels skyrocketing Dallas-area preowned home sales
12:08 PM CST on Monday, December 7, 2009
By STEVE BROWN/ The Dallas Morning News
The North Texas housing market came roaring back in November. Preowned home sales rose by 31 percent last month from a year ago – one of the biggest such increases on record. Also Online
Interactive map: Dallas-area home sales and prices
And median home sales prices were up 5 percent.
The big jump in residential transactions came as large numbers of homebuyers rushed to take advantage of the federal home buying tax credit, which has been extended.
Real estate agents in October sold almost 5,500 preowned homes through their multiple listing service, according to statistics released Monday by the North Texas Residential Information Systems and the Real Estate Center at Texas A&M University.
And condo and townhouse sales were up more than 60 percent from a year ago.
November’s robust sales activity is the latest in a string of recent indicators, which show that the North Texas home market has bottomed out and is turning the corner.
Through the first 11 months of 2009, North Texas home sales are down 12 percent from the same period of last year. And median home sales prices are unchanged year to day from 2008.
November was the second consecutive month that Dallas-Fort Worth area home sales rose from the previous year – ending more than a year of consecutive declines.
Some neighborhoods that weren’t impacted by the federal homebuying incentives saw dramatic spikes in home sales last month.
In the Park Cities, preowned home sales soared 81 percent in November from a year ago.
Sales in close in North Dallas neighborhoods rose 48 percent.
And at the end of November, the inventory of unsold homes on the market fell below 6 months which is considered a balanced market.
12:08 PM CST on Monday, December 7, 2009
By STEVE BROWN/ The Dallas Morning News
The North Texas housing market came roaring back in November. Preowned home sales rose by 31 percent last month from a year ago – one of the biggest such increases on record. Also Online
Interactive map: Dallas-area home sales and prices
And median home sales prices were up 5 percent.
The big jump in residential transactions came as large numbers of homebuyers rushed to take advantage of the federal home buying tax credit, which has been extended.
Real estate agents in October sold almost 5,500 preowned homes through their multiple listing service, according to statistics released Monday by the North Texas Residential Information Systems and the Real Estate Center at Texas A&M University.
And condo and townhouse sales were up more than 60 percent from a year ago.
November’s robust sales activity is the latest in a string of recent indicators, which show that the North Texas home market has bottomed out and is turning the corner.
Through the first 11 months of 2009, North Texas home sales are down 12 percent from the same period of last year. And median home sales prices are unchanged year to day from 2008.
November was the second consecutive month that Dallas-Fort Worth area home sales rose from the previous year – ending more than a year of consecutive declines.
Some neighborhoods that weren’t impacted by the federal homebuying incentives saw dramatic spikes in home sales last month.
In the Park Cities, preowned home sales soared 81 percent in November from a year ago.
Sales in close in North Dallas neighborhoods rose 48 percent.
And at the end of November, the inventory of unsold homes on the market fell below 6 months which is considered a balanced market.
Tuesday, November 10, 2009
Expanded Version of Tax Credit Will Allow More Homebuyers to Qualify
Expanded Version of Tax Credit Will Allow More Homebuyers to Qualify
RISMEDIA, November 9, 2009—President Obama recently signed an expanded version of the $8,000 first-time homebuyer tax credit that was set to expire on November 30. “The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples:
Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.
Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. “If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”
The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”
There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others
-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).
-The credit applies even if you have co-signers on your mortgage loan
For more information, visit www.CMPSInstitute.org.
Read more: http://rismedia.com/2009-11-08/expanded-version-of-tax-credit-will-allow-more-homebuyers-to-qualify/#ixzz0WTkr6IKw
RISMEDIA, November 9, 2009—President Obama recently signed an expanded version of the $8,000 first-time homebuyer tax credit that was set to expire on November 30. “The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples:
Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.
Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. “If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”
The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”
There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others
-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).
-The credit applies even if you have co-signers on your mortgage loan
For more information, visit www.CMPSInstitute.org.
Read more: http://rismedia.com/2009-11-08/expanded-version-of-tax-credit-will-allow-more-homebuyers-to-qualify/#ixzz0WTkr6IKw
Friday, November 6, 2009
TAX CREDIT HAS BEEN EXTENDED
TAX CREDIT HAS BEEN EXTENDED
The $8000 tax credit for first time homebuyer's has been extended. The program was expanded to include a $6500 tax credit on the purchase of a new home to apply to people who have owned a home for at least five years.
Income restrictions will be relaxed, meaning more people could take advantage of the program.
The bill would extend it to apply to home purchases under contract before May 1, 2010
Great news! Watch for more details.
Give us a call for all of your Real Estate needs.You can reach us directly at 817-337-5169 or on the web at www.soldteam.net
Texas Sold Team Realty, LLC
CRS, e-Pro, ABR, Luxury Real Estate Expert
Information provided by Pam Taylor with WR Starkey Mortgage
The $8000 tax credit for first time homebuyer's has been extended. The program was expanded to include a $6500 tax credit on the purchase of a new home to apply to people who have owned a home for at least five years.
Income restrictions will be relaxed, meaning more people could take advantage of the program.
The bill would extend it to apply to home purchases under contract before May 1, 2010
Great news! Watch for more details.
Give us a call for all of your Real Estate needs.You can reach us directly at 817-337-5169 or on the web at www.soldteam.net
Texas Sold Team Realty, LLC
CRS, e-Pro, ABR, Luxury Real Estate Expert
Information provided by Pam Taylor with WR Starkey Mortgage
Tuesday, September 29, 2009
Existing-Home Sales Ease Following 4 Monthly Gains
Existing-Home Sales Ease Following 4 Monthly Gains
RISMEDIA, September 28, 2009—Existing-home sales in August 2009 gave back some of their strong gain in July but remain above year-ago levels, according to the National Association of Realtors®.
Existing-home sales- including single-family, townhomes, condominiums and co-ops- declined 2.7% to a seasonally adjusted annual rate of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4% above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2%.
Lawrence Yun, NAR chief economist, said the tax credit is working. “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions,” he said. “Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.19% in August from 5.22% in July; the rate was 6.48% in August 2008.
An NAR practitioner survey shows first-time buyers purchased 30% of homes in August, and that distressed homes accounted for 31% of transactions; both were unchanged from July. “The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory. An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market,” Yun said.
He added that many buyers had been on the sidelines during the past few years, waiting for signs of stabilization. “Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices. Extending and expanding the tax credit also would help to keep other families from becoming upside down in their mortgages or risk foreclosure,” Yun said.
“When home prices show sustained gains, credit will become more widely available to other sectors because Wall Street will be able to price risks confidently. Stable home values will also allow more families to purchase consumer products and provide a strong boost for the broader economy.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said time is running very short for the existing tax credit. “Because it’s generally taking 60 days to close on a home after a contract is offered, buyers have little time to act to complete a purchase by the November 30 deadline,” he said. “There’s no guarantee what Congress might do, so there’s really no time to waste. Since Realtors® have unparalleled knowledge of local markets, they can also advise first-time buyers on any additional state or local programs that might be able to offer them financial assistance, and help them close on a home before the tax credit expires.”
Total housing inventory at the end of August fell 10.8% to 3.62 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, down from a 9.3-month supply in July. Unsold inventory totals are 16.4% lower than a year ago. The national median existing-home price for all housing types was $177,700 in August, down 12.5% from August 2008. Distressed properties continue to downwardly distort the median price because they generally sell for 15 to 20% less than traditional homes. Single-family home sales fell 2.% to a seasonally adjusted annual rate of 4.48 million in August from a level of 4.61 million in July, but are 2.55 higher than the 4.37 million-unit pace in August 2008. The median existing single-family home price was $177,500 in August, down 12.1% from a year ago. Existing condominium and co-op sales slipped 1.6% to a seasonally adjusted annual rate of 620,000 units in August from a spike of 630,000 in July, but are 10.1% higher than the 563,000-unit level a year ago. The median existing condo price was $179,300 in August, which is 15.7% below August 2008.
Regionally, existing-home sales in the Northeast declined 2.2% to an annual pace of 910,000 in August, but are 5.8% above August 2008. The median price in the Northeast was $241,100, which is 10.5% below a year ago. Existing-home sales in the Midwest fell 6.6% in August to a level of 1.14 million but are unchanged from a year ago. The median price in the Midwest was $149,900, down 10.4% from August 2008. In the South, existing-home sales were down 3.1% to an annual pace of 1.89 million in August but are 1.6% above August 2008. The median price in the South was $157,400, which is 11.0% below a year ago. Existing-home sales in the West declined 2.7% to an annual rate of 1.16 million in August but are 7.4% higher than a year ago. The median price in the West was $220,500, down 12.2% from August 2008.
For more information, visit www.realtor.org.
Read more: http://rismedia.com/2009-09-27/existing-home-sales-ease-following-4-monthly-gains/#ixzz0SVdAMpNc
RISMEDIA, September 28, 2009—Existing-home sales in August 2009 gave back some of their strong gain in July but remain above year-ago levels, according to the National Association of Realtors®.
Existing-home sales- including single-family, townhomes, condominiums and co-ops- declined 2.7% to a seasonally adjusted annual rate of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4% above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2%.
Lawrence Yun, NAR chief economist, said the tax credit is working. “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions,” he said. “Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.19% in August from 5.22% in July; the rate was 6.48% in August 2008.
An NAR practitioner survey shows first-time buyers purchased 30% of homes in August, and that distressed homes accounted for 31% of transactions; both were unchanged from July. “The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory. An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market,” Yun said.
He added that many buyers had been on the sidelines during the past few years, waiting for signs of stabilization. “Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices. Extending and expanding the tax credit also would help to keep other families from becoming upside down in their mortgages or risk foreclosure,” Yun said.
“When home prices show sustained gains, credit will become more widely available to other sectors because Wall Street will be able to price risks confidently. Stable home values will also allow more families to purchase consumer products and provide a strong boost for the broader economy.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said time is running very short for the existing tax credit. “Because it’s generally taking 60 days to close on a home after a contract is offered, buyers have little time to act to complete a purchase by the November 30 deadline,” he said. “There’s no guarantee what Congress might do, so there’s really no time to waste. Since Realtors® have unparalleled knowledge of local markets, they can also advise first-time buyers on any additional state or local programs that might be able to offer them financial assistance, and help them close on a home before the tax credit expires.”
Total housing inventory at the end of August fell 10.8% to 3.62 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, down from a 9.3-month supply in July. Unsold inventory totals are 16.4% lower than a year ago. The national median existing-home price for all housing types was $177,700 in August, down 12.5% from August 2008. Distressed properties continue to downwardly distort the median price because they generally sell for 15 to 20% less than traditional homes. Single-family home sales fell 2.% to a seasonally adjusted annual rate of 4.48 million in August from a level of 4.61 million in July, but are 2.55 higher than the 4.37 million-unit pace in August 2008. The median existing single-family home price was $177,500 in August, down 12.1% from a year ago. Existing condominium and co-op sales slipped 1.6% to a seasonally adjusted annual rate of 620,000 units in August from a spike of 630,000 in July, but are 10.1% higher than the 563,000-unit level a year ago. The median existing condo price was $179,300 in August, which is 15.7% below August 2008.
Regionally, existing-home sales in the Northeast declined 2.2% to an annual pace of 910,000 in August, but are 5.8% above August 2008. The median price in the Northeast was $241,100, which is 10.5% below a year ago. Existing-home sales in the Midwest fell 6.6% in August to a level of 1.14 million but are unchanged from a year ago. The median price in the Midwest was $149,900, down 10.4% from August 2008. In the South, existing-home sales were down 3.1% to an annual pace of 1.89 million in August but are 1.6% above August 2008. The median price in the South was $157,400, which is 11.0% below a year ago. Existing-home sales in the West declined 2.7% to an annual rate of 1.16 million in August but are 7.4% higher than a year ago. The median price in the West was $220,500, down 12.2% from August 2008.
For more information, visit www.realtor.org.
Read more: http://rismedia.com/2009-09-27/existing-home-sales-ease-following-4-monthly-gains/#ixzz0SVdAMpNc
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