First Time Homebuyer Credit

Posted on Wednesday, November 26, 2008 at 12:02PM by Bill Webb Post a Comment MONDAY, NOVEMBER 10, 2008 First Time Buyer Credit The tax credit may be enough of an incentive for potential buyers to jump off the fence. That is, if they know about it. By Robert Freedman November 2008 The $7,500 home ownership tax credit that the federal government created earlier this year as part of the Housing and Economic Recovery Act (H.R. 3221) is another tool at your disposal to encourage potential buyers to jump off the fence and get into the real estate market. When you combine the tax credit with today’s low interest rates, wide selection of for-sale inventory, and affordable home prices, many of the pieces are in place for your customers to buy now. But tax credits can be confusing. To help your clients understand how the credit works and why it would help them, you must learn the details. Here are 6 things you should be able to explain to prospects and clients: 1. Buyers have until July 2009 to make a purchase that qualifies. The tax credit was passed in July of this year as part of the Housing and Economic Recovery Act (H.R. 3221). It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009, so if your customers wait to buy in the first half of 2009 they can take the credit on their 2009 tax return. Taxpayers can take the credit on their 2008 tax return if they bought their house this year after April 9. 2. Buyers don't really have to be "first-timers." The tax credit is actually available to any individual or household that hasn’t owned a home for at least three years. And the NATIONAL ASSOCIATION OF REALTORS® has asked Congress to expand the credit to all buyers, not just those who haven't owned a primary residence in recent years. 3. Even if buyers exceed the income limit, they can benefit from the credit. The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so your customers can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500. Sounds like a great deal. But what if your clients make more money than the income limit of $75,000 for individuals and $150,000 for households? Good news: Individuals whose income exceeds the $75,000 limit but don't make more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000. By the way, any house is eligible as long as it’s a primary residence and is in the United States. 4. Think of it as an interest-free loan. The federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years, although repayment will be no more than $500 yearly and payments will not start until 2011. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable. NAR is pushing congress to remove the repayment provision, making this tax credit a true tax credit rather than an interest-free loan. 5. You don't have to be authorized before making a home purchase. There is no pre-purchase authorization, application, or other approval process. Eligible buyers simply have to claim the credit on their IRS Form 1040 tax return and/or any form that the IRS might devise. 6. New-home construction qualifies. For a home that a buyer constructs, the purchase date is the first date the buyer occupies the home.However, any home that is not a primary residence, such as a vacation home or income property, does not qualify. NAR Asking Congress to Expand Credit As mentioned above, NAR has asked Congress to do away with the repayment provision of the first-time buyer tax credit and expand the credit to all home buyers, not just first-timers. The proposals were part of a four-point housing stimulus plan the association submitted in mid-October. “Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible,” said NAR President Richard F. Gaylord. “It is vital to the economy that Congress take specific actions to boost the confidence of potential homebuyers in the housing market and make it easier for qualified buyers to get safe and affordable mortgage loans. Article courtesy of Realtor Magazine

New Case Shiller Data Shows only Slight Change for DFW

Posted on Tuesday, October 28, 2008 at 05:27PM by Bill Webb 1 Comment The latest data from the Case-Shiller report on home prices shows that while home prices in the 20 largest markets continues to decline, the Dallas market has shown a slow down in the rate of decline and is in fact up for the year to date. The Dallas market continues to be one of the most stable markets in the country. The Dallas market enjoys a 2.3% job growth rate which is well above last year's U.S growth rate of 1.5% . The Dallas area leads the nation along with other Texas cities. The job growth rate would appear to be strong for the remainder of 2008 and into 2009. Dallas new home starts are down 34.8%. This represents a concerted effort by builders to keep inventories at low levels when compared to years past. This will continue to support the re-sale market in the area. When looking at existing home sales it is important to break the Dallas metroplex into it's smaller community parts. When we do this we see that there can be a wide swing in home sales from north to south or east to west. That is why this blog continues to focus on the communities to the north of Dallas in particular. The DFW foreclosure rate is also low at 1.4%. Again, you must look at particular communities in order to get a true picture of how the foreclosure rate is affecting the area. The pink elephant that is in the room with us is the U.S economy. Many consumers are frozen because of the media's portrait of an economy where credit is unattainable. This is not the case at all. Frankly, it is no harder to obtain a mortgage today than it was two months ago. If you are a borrower with good credit, a job, and have some money for a down payment then you can obtain a mortgage at historically low interest rates. With home prices on the lower end when compared to recent years, it is an excellent time to make a purchase or to move up into a larger home. If you have specific questions about your personal situation please contact me. I will be more than happy to help with the decision making process.

Is The Plano Real Estate Maket Warming Up

Posted on Wednesday, September 10, 2008 at 01:52PM by Bill Webb Post a Comment The latest statistics show that the local real estate market in the North Dallas Suburbs may be starting to turn. The shift in the local market has been swift in comparison to other markets and certainly not as severe as some. While the roots of the downturn showed up in 2006, we did not see the full effect of the pressure on the market until the sub-prime crisis of 2007. In the last year we have seen home sales down about 13-35%(depending an area) for year to date. The monthly pending sale numbers for the five areas that I follow are actually better for the month of August. Prices remain steady with only Allen and McKinney showing a decrease in the average price versus a year ago. Plano, Richardson, and Frisco all show a slight increase. That being said, I would suggest that prices are simply flat. Note also that the months of inventory for each area is down for the month as compared to the year to date average. This is certainly a good sign. A big part of the reason for this is that there are fewer homes for sale in the marketplace. In all areas that i cover the decrease in homes for sale is a good bit steeper in August than for the year to date. This suggests that there is more price resistance from the seller side at this time than earlier in the year. Plano, for instance, shows only a 4.6 month supply of homes on the market in August. This is down from 4.9 the previous month and 5months supply year to date. On the demand side of the equation we have a Dallas job market that leads the nation in job growth. We have a strong local economy and we are in generally good economic condition. The Dallas area continues to shine as an affordable housing market. While I am not sure that we can declare that our housing market has turned and indeed headed upward. I do think we are seeing some signs that suggest a sustained recovery is not far off.

North Dallas Suburb Housing Markets Turn Upward

Posted on Monday, October 20, 2008 at 02:13PM by Bill Webb Post a Comment On September 10th I wrote about a possible turn in the housing statistics in Plano and other North Dallas Suburbs. Those numbers were confirmed by the September statistics as Plano, and Allen lead the way to a significant change in pending sales, active listings and the months supply of inventory. For instance, Plano has a pending sales to active listing ratio of over 23%. This is up from 18% in August. Allen was even more dramatic in going to 23% from 16%. This show a definite narrowing of the available supply to the existing demand. Richardson numbers also showed improvment. While McKinney and Frisco also improved, the numbers for those two areas are still lower than they showed be in order to proclaim an end to the housing slump. All of this may be tempered by the financial mess of the last two weeks. We will almost certainly see weaker numbers in October. As we work through the financial maze we should see stronger housing market in the months to come. Bear in mind that we can change directions in a minute depending on the direction our overall economy takes. I do believe that the relative strength of the Dallas economy is contributing to this housing turnaround. Dallas builders have also done a fairly good job of reducing inventories to manageable levels. As it stands now I think we will see a stronger housing market starting with November and carrying through to 2009. If you would like clarification of the numbers below or have secific questions about your area or neighborhood please email me or call. We would be happy to help you with information about your area.

Great Places to Retire - Plano Texas

Posted on Wednesday, March 5, 2008 at 03:44PM by Bill Webb Post a Comment When I think of retirement (which is not that far away) I always think of that place at the beach overlooking the ocean. How I will get up every morning and walk my dod down the beach and then go play a round of golf or some tennis with my friends. I recently have had to rethink that position. My parents lived on the outer banks of North Carolina and they loved the area. The ability to be so close to the ocean in a laid back community seemed like the perfect place to retire. That is until my father's health started to fail. A trip to the doctor was a 45 minute one way trip. The grocery store was 20 minutes away and even the closed bank, post office or gas station was 15-20 minutes away. When his health got really bad we had a problem with getting specialists that understood his illness. The community being small simply did not have the infrastructure that seniors really need. Why Plano is a great place to retire: What I learned from that experience was that I need to take a look at the retirement issue and make some decisions as to what might be the best fit for my wife and me. Having great health facilities that are close by is a great benefit. As we age we develop aches and pains that occasionally need to be attended to. Having a number of restaurants, banks, gas stations, auto mechanics, grocery stores and world class shopping within a few miles is also a huge plus. This is not to mention the cost of living. The Dallas area is one of the most affordable cities in the country to have the facilities and infrastructure that it has. Property values here are among the most undervalued in the nation. With no state income tax the area affords retirees with a tremendous value when compared to other areas. The wide range of entertainment, performing arts, lakes, parks and other facilities make this area a great place for the empty nester or retiree to live. When I look at all the things that are available to do I see no reason to leave this area. The only negative that I can see is the summer temperature. It can get to 100 degrees. But then when it does I am usually inside or I am in my pool enjoying the water. The winters are actually quite mild with not too many days under 30 degrees and rarely are their any lows under 20. All in all, the Plano area offers the retiree a great place to live:1) Great healthcare - Three major hospitals with others coming. Private clinics and physiscians are in plentiful supply.2) Major financial center with every bank immaginable available within a few miles.3) World Class shopping with both high end and more modest shopping readily available4) At two hundred fifty thousand people, Plano enjoys all the benefits of being a suburb of Dallas without the congestion. Traffic moves easily throughout the city.5) Very affordable housing - Plano's housing market is one of the most undervalued in the nation.6) Great schools - The perfect place for your kids to move with their family. You will be close without having to move to them.7) Great weather - Lots of sunshine and warm days in winter. Playing golf in January is very doable.8) The Dallas metroplex is a major cultural center with the largest performing arts district in the nation currently under construction. All of this makes the Plano area a can't miss area for the empty nester or retiree.

Using the Internet in the Home Selling or Buying Process

Posted on Wednesday, February 27, 2008 at 01:46PM by Bill Webb Post a Comment As a realtor, I am amazed at how many people look to the internet as the single and most accurate information on the value of their home. Sellers using website such as Zillow and other such companies as the definitive source for a pricing strategy when marketing their home for sale. Likewise buyers use these same resources as a sign of true value when determining how much to offer on a home that is for sale. I have no problem with any of the websites such as Zillow, Redfin or others as tools to use in helping a buyer or a seller with determining value. To think that we would use such information as an absolute is beyond me. The various websites available to today's consumer should be looked at as a set of tools. Many of the available tools are useful in helping us determine a possible range of value for the particular property that we are interested in buying or selling. When we use the internet as a definitive source for value we make the assumption that homes are commodities. Nothing could be further from the truth. Every home in every neighborhood is uniques is some way. It may be in good condition or it may be in poor condition. The floorplan may appeal to some while others would find it undesireable. We can only know these things by seeing the home and knowing what the market expects. Luckily Zillow and some of the others state clearly that their estimates of value are not appraisals and should not be construed as such. Yet we constantly see stories of people who use internet estimates as a true indicator of value and then use these estimates in the selling or buying of a property. Many times these individuals are sorely disappointed with the results. I recently read a story in the USA Today about how the internet is renovating the way that homes are sold. The article talks about a gentleman who listed his home on Zillow at a "Make Me Move" price of $699,000. Weeks later he was about to market the property through an agent at $659,000. This represented an almost 6% reduction in his original price. As luck would have it he recieved an email from someone on the website that was interested in the home. They settled on a price of $619,000 and he paid the agent $3095.00 to handle the paper work. This resulted in a net sale price of $615,905 or 6.5% below where he was going to list with the agent and 12% below his "Make Me Move" price. I do not know the area that this transaction took place in but it is my belief that had the seller enlisted the help of a real estate professional he would have priced his home closer too true market value to begin with, sold it in a shorter timeframe (saving carrying cost) and most likely put more money in his pocket at the end of the day. The article went on to claim how the seller had saved paying a typical 6% commission. As I see it he simply reduced the price by six percent and gave that money to the buyer in the form of a price reduction. At the end of the day, the buyer was most certainly better off having paid significantly below the original asking price. The seller on the other hand came out with far less money than his original asking price. My point is this: Use the internet as a tool in your price discovery process. 1) Use the internet to search for properties that are available in the area that you would like to move to.2) Use the internet to find information about the area that you are moving to.3) Use the internet to help determine cost of living comparisions when moving from one geographic area to another4) Use the internet to see what competition is in the market place when you are getting ready to list your home.5) Use the internet to discover what local economic conditions exist that will affect real estate values in an area. What is going on in Miami has little to do with what is going on in Dallas.6) Use the internet as a marketing vehicle to expose potential buyers to your property. When you are ready to make a move call a professional realtor. A good agent can save you thousands of dollars and can ease the stress of the transaction. The For Sale By Owner community comes to this realization every day. Realtor based transaction will sell much quicker on average and bring much higher sale prices than those of the For Sale By Owner. A home is generally the largest and most important purchase you will make in your lifetime. To handle the transaction in an uninformed and unprepared manner may cost you tens of thousands of dollars and many sleepless nights as well.

North Dallas Hosuing Numbers Remain Anemic

Posted on Saturday, February 16, 2008 at 03:09PM by Bill Webb Post a Comment Plano and the surrounding areas had yet another month of declining numbers from last year. Sales for all of North Texas were down 17%. Plano Sales were down 9% and average price unchanged. Interestingly though, the median price was up 8%. Things were worse in Allen and McKinney with Allen posting a30% drop and McKinney a 28% drop. Frisco was able to show a smaller decrease in units (5%) but the area's average price was down 7% and the median price was down 14%. Builder inventories in the Frisco area are probably the reason for the downward pressure on prices. The days on market time for the area was also significantly up. Plano came in at 88 days followed by McKinney at 88, Frisco at 99 and Allen at 111. This compares with all of North Texas at 88 days. New listings were up by 1% in Plano and total listings were up 6% over the previous year. Allen and McKinney both showed a drop in listings for the month versus January of 2007. McKinney was also down 8% in total listings versus a year ago. Frisco showed a small decrease on the monthly listings but were still 12% ahead in total listings from a year ago. North Texas as a whole posted a 9% decrease on monthly new listings and a 1% increase for total listings versus a year ago. We also have a hotness ratio that is provided to us by the North Texas Real Estate Information System. This ratio is obtain by dividing the pending sales for single family homes by the current inventory. With 126 areas reporting, Plano ranked 16th. They were followed by Allen at 19th, Frisco at 70th and McKinney at 71st. This number could give us some clues as to market direction in a more timely manner than just looking at the months of inventory. We will have more on this number in future articles. So, what do we have? Statistically we have a market that is at a crossroads. We are seeing some numbers decline while other numbers stubbornly hold on to a positive bias. For instance sales for the month in Plano are down 9% from a year ago. Months of inventory however is only at 4.1 which is hardly considered a buyer's market. The road that the market chooses will be unveiled in the next few months. interest rates, recession fears, foreclosures and gas prices could all play a part in the direction we take. Regardless of the direction, I do not think we will see the wild swings that we are seeing across the country. Our gut tells us that business has been stronger in February than it was in January. I believe that the statistics will bear me out, We will continue to watch for trends and let you know as soon as they show up. Stay tuned.