A Little Multimedia For Us

Here is the multimedia presentation of the recent market stats. I like it.

Market Stats Keep Improving

Northern Virginia housing sales statistics for October were published today and they are consistently improving, especially in the lower end of the market. Just over 10% more homes sold this October compared to a year ago. Median prices are down only .6% and the number of days a property is on market is down by 38%. A total of 1990 homes went under contract last month, with 6877 listings still active.
On a weekly basis, Halloween week was frightfully busy! The week of October 31, 52% more homes went under contract than a year ago. That’s certainly not a dead market! Actually, this is not the least bit surprising since prior to the extension of the first time buyer tax credit, Halloween week was the last week to write a contract and be confident that the property could close within 30 days. Before Congress took action, the tax credit was going to expire November 30.
New listings are coming on the market at a rate slower than last year with 5.6% fewer new listings than last year.
We Realtors who are scouring the streets for properties are hopeful that the new $6500 tax credit for existing home owners will pull a few sellers off the fence. We need more inventory!
The government’s housing push last week should keep the momentum rolling. With the extension of the first time buyer tax credit until next spring, higher income limits for that credit, and a new credit for existing home owners who are upsizing or downsizing, I’m planning on a busy winter and spring! Once again, I’m so grateful to be in the Northern Virginia market where our location keeps has helped real estate stabilize more quickly than the rest of the country.

Will The Tax Credit Go Viral?

In my world of real estate, the federal government extending the first time home buyer tax credit and adding a new credit for current home owners is big news. My Realtor friends, I, and many first time buyer clients were holding our collective breath last week and shouting a resounding “yes” as Congress and President Obama did their bit to continue to stimulate the housing market.

And in this day of quick media, I wasn’t surprised when one of my clients told me that she’d received a flyer about the home buyer tax credit from three of her Realtor friends on the day Obama signed the legislation. I laughed. The Virginia Association of Realtor flyer had literally gone viral, I thought.

At the same time, when I was meeting potential new buyers at an Open House this past Sunday, I was surprised how few of people who wandered in were aware of the tax news. I would hand prospective buyers the VAR flyer, and they’d give me a “hmm” and a nod. I wanted to shout. This is big news. This will help stimulate one part of the market that has been stuck: houses between $500K and $800K.

But I’m guessing that many of the people who came through the Open House were either already actively engaged in looking for a house because the time is right for them to buy or were either mildly or seriously browsing. It didn’t seem like there were a flood of folks who were rushing out to take advantage of the big news. Of course, this house is priced at $875K and would not qualify for the credit.

But at the same time, I had to wonder if there might be some truth to the argument that these tax credits don’t work Some argue the government is only awarding those would be buying anyway.

Still, based on the activity in the low end home buyer market over the last year, I know that the $8K tax credit brought more buyers out. Hopefully the existing home owner credit will do the same in the $500K to $800K market.

A Forbes magazine article this week agrees. “Let the Downsizing Begin” points out that the credit is good for those who are ready to downsize. I’m optimistic that it will look attractive to those who ready to move up also.

RE/MAX, NAR, and others are quickly putting out the word out, with videos and flyers encouraging buyers to take advantage of the tax credit.

New Tax Credit to Get Home Owners Thinking

President Obama is expected to sign a bill today extending the $8000 first time homebuyer tax credit and enacting a $6500 tax credit for repeat buyers who’ve been in their house five of the last eight years. Both credits are good until May 1, 2010.
The extension and the new credit offer an additional nudge to buyers compared to the current first time buyer tax credit.
It will likely be enough to nudge some sellers off the fence who have been waiting for the market to turn around. We’ll likely see the biggest boost in sales in the $500K to $800K range, about 23% of current listings in Northern Virginia. The houses under $500K have already been moving much more quickly, with about 1 house sold for every 3 active listings in the $450K to $500K price range last month. Higher priced houses are moving slower, with about one house selling for every five active listings in the $700K to $799K price range.
However, for those repeat buyers, the new home must be under $800,000 in value, and the income limit is $225,000 for a married couple. Clearly, Congress’s goal was to take care of the middle and lower income buyers and not the very rich.
But while folks spending more than $800K for a house may not make a decision based on whether or not they get a $6500 tax credit. The hype may even help the higher ends of the market if people start to believe the market is moving again.
The Washington Post called this “a big tax break.” That headline is enough to get everyone thinking.

Tax Credit Good For First Timers; Help For Old Owners?

Great news for the lower end housing market and a slight nudge for the upper ends. Congress is expected to extend the $8000 first time homebuyer tax credit this week until May 1, 2010, and offer a new tax credit of $6500 to repeat buyers who purchase between December 1 and May 1, 2010. Those repeat buyers must have lived in their house for five consecutive years. The bill also allows more people to qualify: the new income limits are $125,000 for single tax filers and $225,000 for married couples.
The first time homebuyer tax credit has really given the first time buyer market a jump start nationally. Pending home sales are up 6.1% compared to August, 2009, and up 21% compared to September, 2008. The gain from a year ago is the largest annual increase on record.
But in our expensive area, the numbers are looking much better at the lower end. In Northern Virginia’s “low end market” of under $500,000. Overall, in Northern Virginia, pending home sales were up 61% for the week of October 24, compared to a year ago. And over the last three months there have been almost 9,000 more signed purchase agreements than there were during the same period last year.
However, note a closer look reveals that those sales are in the lower price ranges. For example, in Fairfax County, Virginia, in September, in the $400K to $450K range, about one house sold for every two active listings. And in the $450K to $500K price range, about 1 house sold for every 3 active listings. But in the upper end of the market, sales were much, much slower. About one house sold for every five active listings in the $700K to $799K price range, and in the $800K to $899K price range, about one house sold for every nine houses on the market.
So while the first time buyer tax credit has stimulated the low end of the market, the upper end is still very, very slow. No doubt that the $6500 tax credit will give the upper end a bit of a nudge, but I’m not sure it will be enough of a nudge, especially in a market of houses worth more than a half-a-million-dollars.

Busy, Busy, Busy Market

I haven’t been keeping up with this blog because I’ve been out there trying to stay one step ahead of this crazy, crazy marketplace. For the last nine weeks, the number of sales in Northern Virginia has gone up over 20% compared to last year. The week of May 16, we saw a year-over-year increase of 40%. That’s right 40%. I had to laugh when I saw the recent commercial with the buyers literally sitting on the fence, saying they are waiting. When asked, what are you waiting for, they said they did not know.
The buyers I know are starting to jump off the fence. There is plenty of reason to with the first time buyer $8K tax credit, low interest rates, and lower prices.
In the lower price ranges (under $350K), cash investors and first time buyers are competing for properties that are loaded with potential, but appear to currently be dumps. We are seeing multiple offers on these properties — even when these homes are short sales.
Typically the DC-area market slows down after Memorial Day. I am guessing this year it will move ahead full steam until we hit the steam of August, especially in the lower end. Our biggest problem now is inventory. There is not a lot of it. The home that show really well and are priced really well, are selling relatively quickly, sometimes with multiple offers.
Now if we could only get sellers to get off the fence, the buyers would have more to choose from!

NOVA Sales Up Again.

More good news. The number of homes selling in Northern Virginia continues to spike up and number of new listings are going down, according the local MLS.
According to MRIS, for the week ending March 28 there were 2,809 signed purchase
agreements, above the same week last year by a whopping 46.8
percent.
Over the last three months there have been 16.7 percent and
over 3,800 more pending sales than there were a year ago.
Strong demand and weak listing activity mean that the inventory of
homes for sale in the region continues to fall. There are now 22.1
percent fewer homes for sale than there were at this time in 2008.
This contributes to multiple other indications of the local market improving.

US News: Homeowner Tax Breaks

Ah, the beauty of tax breaks.
U.S.News & World Report
5 Hidden Tax Breaks for Homeowners
Thursday April 2, 11:37 am ET
By Luke Mullins

As the real estate crash destroys property values across the country, it’s easy to lose sight of one of the most appealing features of owning a home: tax savings. Uncle Sam has long used the tax code to promote home ownership. And although real estate prices are plummeting, those tax savings remain as lucrative as ever. While some of these benefits are well known–such as the mortgage interest deduction–others are less intuitive. At the same time, recently enacted legislation has introduced new opportunities for tax savings. Here are five easy-to-overlook, housing-related tax breaks you’ll want to remember this April 15th:
1. First-time home buyer tax credit: President Barack Obama’s $787 billion economic stimulus package–which became law in mid February–included a tax credit designed to ramp up housing demand. The new law offers eligible first-time home buyers a tax credit worth up to $8,000 when they purchase a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009. “It’s not a huge amount of money, but neither is it trivial,” says Mike Larson of Weiss Research. The credit does not have to be paid back, but it’s subject to income limitations. Under the terms of the legislation, a first-time home buyer is defined as anyone who has not had an ownership interest in a principal residence for three years before the transaction.

2. Property tax deduction for non-itemizers: A housing law enacted in July provided a perk for home owners who don’t itemize their taxes. The move enables such taxpayers to claim an extra deduction in addition to the standard deduction for tax year 2008. Under the terms of the legislation, non-itemizing homeowners can deduct up to $500 of property taxes if they are filing individually, or up to $1,000 if they are filing jointly. “That will have a direct, dollar-for-dollar impact on some folks,” says Linda Goold, the director of federal tax programs for the National Association of Realtors.

3. Energy efficient home improvements: The financial bailout package, which became law in October, expanded the scope of home improvements eligible for tax credits in 2008. The legislation enabled homeowners who had certain wind energy systems in place last year to qualify for tax credits worth 30 percent of the purchase and instillation cost, up to a maximum of $4,000. It also boosted the size of the tax credit available for installing geothermal heat pumps. In addition, home owners can qualify for similar credits on their 2008 taxes if they installed solar water heaters, fuel cells, or solar panels last year. While the savings for these energy efficient home improvements are limited for 2008, the recently-enacted economic stimulus package increased the benefits going forward. “For 2009, it’s much broader,” says Karen Schneider of Energy Star, an Environmental Protection Agency and Department of Energy joint program.

4. Home office tax deduction: Homeowners who work from home may be eligible for additional tax savings. The Internal Revenue Service allows certain property owners who use a part of their home to conduct business to claim a home office deduction. In order to qualify, a portion of the house–say, a room–must be used exclusively and regularly as a principal place of business or as a location to interact with customers. A room that is regularly used for some types of storage, as a day care facility, or as rental property may qualify as well. The value of the deduction will depend on the size of the space used. But those considering claiming this deduction should proceed with caution, as IRS auditors are on the lookout for its abuse. To avoid problems, homeowners that claim the home office deduction “need to keep very careful records and to make an assessment of factually why they think they are justified [in taking it],” Goold says.

5. Moving expenses: In certain cases, homeowners who move from one location to another on account of a job can deduct the moving expenses from their taxes. In order to do so, the new job must be located 50 or more miles further away from the previous home than the distance between the previous job location and the previous home. (For example, if your previous job was located five miles away from your old home, your new job location would have to be at least 55 miles away from your previous home.) Employees will also have to work full-time for a minimum of 39 weeks within the first year in the general vicinity of the new location to qualify for the credit. “It’s a statutory adjustment,” says Robert Dietz, the director of tax issues for the National Association of Home Builders, “which means…it’s a deduction you can claim regardless of itemization.” You do not, however, need to be a homeowner to take advantage of this tax benefit.

NOVA Home Sales Still on The Rise, Mortgage Rates Down

Home sales are still on the rise in Northern Va., another sign that area housing market is starting to rebound. During the week ending March 21, the number of sales went up 34% more than the same week a year ago. This is the 15th consecutive week that the number of sales is up, and with the exception of one week, the 55th consecutive week that the number of new listings is down.

There are currently 18,060 fewer homes for sale than there were one
year ago. With increase in sales and the lower inventory, NOVA’s MLS predicts the number of days on market will start to go down soon.

At the same time, pending home sales were up over 2.1% in February from the prior month and affordability hit a historic high.

In the meantime, thanks to the Fed’s purchase of bonds, mortgages rates on 30-year mortgages fell to the lowest level on record for the second consecutive week after the Federal Reserve launched a new effort to assist the staggering U.S. housing market.

Average rates on 30-year fixed-rate mortgages dropped to 4.78 percent this week, from 4.85 percent last week, according to Freddie Mac. That’s the lowest since 1971 when Freddie Mac’s started tracking rates and it is a one percentage point lower than a year ago.

Weekly mortgage applications are up for the fourth week in a row for the week of March 27, according to the Mortgage Bankers’ Association. Applications are up 3.0% week-over-week. The previous week, applications were up 32.2%.

Washington Post: Republicans Want Bigger Home Buyer Tax Credit.

The Washington Post is reporting that on Wednesday House Republican leaders plan to unveil a housing package that would increase the tax credits available for home buyers and would direct law enforcement to crack down on mortgage fraud.

According to the Post, borrowers refinancing their mortgage would be eligible for $5,000 to help cover closing costs or to reduce their principal balance. The plan also revives a $15,000 home buyer tax credit proposal that Republicans pushed last year. This proposal would require the borrower to have at least a 5 percent down payment. Both programs would expire in July 2010.

Currently, there is a $8,000 tax credit that is limited to first time buyers or buyers who have not owned a home for three years.

Such a credit would be especially important in the high cost Washington DC area market, including Northern Virginia.