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Homebuyer Tax Credit Lives On, and Expands
It appears we can take off the “First Time” prefix and and just call it the “Homebuyers Tax Credit.” The government’s housing stimulus plan continues past its original November 30 deadline and actually grows in scope.
The Senate and House have approved a bill extending the $8,000 tax credit and offering move-up buyers a similar $6,500 benefit. President Obama is expected to sign this quickly, since the bill contains unemployment benefit provisions as well.
Here’s the latest:
- The tax credit would be $8,000 for first-time home buyers and $6,500 for move-up buyers (from December 1, 2009 to April 30, 2010).
- Move-up buyers will be eligible, as long as they have lived in their principal residence at least 5 years.
- Contracts through April 30, 2010 will qualify, but closing must occur within 60 days.
- The income limits have been raised–$125,000 for single return and $225,000 joint return for both first-time and move-up buyers.
- Cost of the home may not exceed $800,000 to be eligible.
- Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.
- Home buyers would not have to repay the credit, as long as the home remains their principal residence for 36 months after the purchase date.
More people will qualify for the plan (high income earners and current homeowners). And the tax credit will sunset just as the peak real estate season is ramping up.
So the question remains, does this expansion move your housing timetable up? Sound off in the comments, please.
Update on First-Time Buyer Credit: Will It Stay or Will It Go?
Diana Olick at CNBC covered HUD Secretary Shaun Donovan’s address before the Senate Banking Committee October 20. Sounds like HUD isn’t so sure that the credit will continue:
I am also aware of the strong support in Congress for doing more to support the housing market, including extending the First Time Home Buyer Tax Credit beyond 2009. At the same time, I am mindful that these proposals can be very expensive, especially at a time of significant budget deficits. I can assure you the Administration will work with Congress to fashion appropriate and effective home buyer incentives, mindful of both their benefits to stimulating new demand and their costs to the American taxpayer.
Politicians on both sides are taking a hard look at the expense of the stimulus vs. the potential effects of stalling the momentum the market has made through the year. Sounds like a decision is still weeks away.
Full commentary at http://www.cnbc.com//id/33398833.
Update: Atwater Auction in Portland’s South Waterfront
Update September 22, 2009: I didn’t attend the auction because my client decided not to bid. But Ryan Frank from The Oregonian did a bang-up job of following the action, even though he got thrown out of the bidding room. Be sure to read his write-up. Bottom line, the new average per square foot in the South Waterfront has effectively been reset to $300/sq. ft.
My small post about the auction scheduled for September 21 for the South Waterfront’s Atwater condo project attracted a fair amount of traffic, so I thought I would update it. I visited the property a few weeks ago for some first-hand assessment. Buyer traffic through the units was brisk. I don’t know if that translates to big participation at the auction or not.
Forty units of various size are slated for the auction. If all 40 were to sell, then the building would basically only be 1/2 sold out. Perhaps the marketing company will put together another auction if this auction is successful.
So, a little Q and A:
How does someone participate in the auction?
You must register and get pre-qualified to participate in Sunday’s auction by 7 pm on Friday, September 18. You can visit the condos between 11 am and 7 pm each day through Friday. If you want your own agent representative to guide you through the process, they must accompany you at the first visit to the property and register themselves.
What are the general contract terms?
The sales contract does not offer much in the way of protections for buyers. You cannot use a property inspection as a contingency for purchase. You cannot use a typical financing contingency. In other words, you will likely lose your earnest money deposit if you fail to close the transaction.
All the purchase paperwork and disclosures are available in advance from the marketing company (registration required), so you won’t be surprised at the signing table. You must close your purchase on or before October 19, 2009. They are offering a $2,500 incentive to close the transaction before October 5.
What is the auction format?
It is a live auction. Open bid amounts start at about 1/2 of the original list price, with increments controlled by the auctioneer. There is no published, pre-determined order to how the units that will be auctioned. You should likely have a back-up unit in mind in case your first choice is gone. If you like to see how the auction will be operated, you can go to a ‘mock auction’ at 6 pm on Saturday at the Marriott.
You must bring a cash equivalent (check or money order) for $2,500 to the auction. If you have a winning bid, you will immediately go to a separate room to sign an official contract and deposit 3% of the sale price with Ticor Title as earnest money.
How much are the HOA fees?
The homeowner association fees are equivalent to $0.303 per square foot, or $484.49 per month on a 1,594 sq. ft. 2 bedroom, 2 bathroom unit for example. The HOA fees cover water, sewer, and garbage for utilities, plus management, maintenance of all common areas, insurance, etc.
Is financing available?
If you need a mortgage, you must be pre-qualified through the Atwater’s two preferred lenders, Bank of America or MetLife. These lenders are offering $1,500 credit toward your closing costs. You’ll have 5 days to complete the loan application process after your winning bid. You can arrange your own financing, but I doubt outside conventional lenders will loan on this project. If you’re paying cash you must show proof of funds.
What about the property?
The units are very nice, comparable to the Meriwether and much of what is in the Pearl District–appointed with granite counters, nice appliances, etc. The high-end units (what I saw anyway) were fine, but I felt the Meriwether had better views (at least in the East building). There’s very little in the way common area space (i.e. no workout room), but there is a mid-sized community room in the foyer. Some extra storage in the basement may also be available for an extra fee.
What is the parking situation?
Each unit has a deeded, secure parking spot. Two bedroom units get 2 spots.
KOIN recently did a piece on the auction:
Photo courtesy of Excell Marketing Group.
Recent real estate reporting by Portland’s daily paper
This weekend featured a fair amount of front-page reporting on Portland’s housing market by The Oregonian, the area’s only daily newspaper. Worth reading if you don’t get doorstep delivery.
Q&A: Advice for navigating the housing downturn
Columnist Ryan Frank touches on a number of consumer questions regarding the housing market. And, scroll to the bottom of this story for more on how current home buyers are faring in the current environment.
Is PDX housing hitting a false bottom?
Ryan Frank follows up his article with a sundry rundown of housing information resources.
Modifying loans creates credit mess, not relief
Brent Hunsberger of The Oregonian’s money beat shares the perils of a couple local consumers seeking loan modifications, when proactively solicited by the lender. Caveat emptor.
When Renting Doesn’t Turn Out So Well
Despite the current popular advice to not buy a home in a recessionary economy, here’s some counterpoint regarding the risks of renting.
Willamette Week shares these stories of Room 120 at the Multnomah County Courthouse, where tenants and landlords do battle.
I’m not being a Realtor shill for sharing this. Owning isn’t for everyone or every season, but it does provide you with more stability and control over your home life.
Photo courtesy of sashafatcat, used under Creative Commons license.
No. That’s not Mickey Mouse in your sewer line.
You just never know what you’ll run into during a home inspection. Here’s my latest sewer inspection (scope) result. The audio starts at 10 seconds and ends at around 50 seconds:
As you can hear, the inspector is delighted (“Sweet!”), not because he found rats in the sewer, but because he got some video footage of rats to share in his training sessions. I’m the one chuckling, nervously, in the background.
The buyers, um, did not find much humor in the discovery. In this case, however, the hole was near the city main, past the curb out in the street and will be the city’s repair.
But, here’s the point. I’ve had three sewer scopes done in past few weeks. And all three failed due to bellies (low points that hold water and waste) or separated joints in the pipe that will eventually cause problems. Even on new construction, it’s worth the $100 test fee, even if you don’t find rats.
UPDATE 07/01/2009:
If you thought that was gross, check out this sewer footage from North Carolina (hat tip Mike Rohrig).
re:PDX Home Search Page Now Available
It thrills me to no end to announce the availability of my long-awaited (awaited by me, anyway) real estate search page here at re:PDX. The software developers and designers in my company have been dealing with my persnickity preferences in incorporating a map-based search into the site, but here it is.
Serious shoppers and real estate junkies (you know who you are) alike will like it. Features:
- It’s Google map-based.
- It’s neighborhood-defined.
- It contains all homes for sale in the Portland MLS that are approved for internet display.
- It’s free to use and no registration is required to use the map.
- If you would like to save homes to a Favorites list for future viewing, you can do so by setting up an account.
- You can even request a showing of any listing with just a click.
To see it in action, just click the Home Search in the top menu.
$15K tax incentive ends up on cutting room floor
Tax credit stimulus for 2009 home buyers dies in compromise. Maybe. Probably. Details covered ably by The Phoenix Real Estate Guy.
Is 4.5% and $15,000 Stimulating Enough?
It appears the Federal government is pulling out all the stops on resuscitating the U.S. housing market.
As of Wednesday, February 11, the economic stimulus package considered by the Senate included an up-to-$15,000 tax credit for all homebuyers in a yet-to-be-determined time frame.
At the same time, theories that Government action that could drive mortgage rates down to 4.5% sometime this year continue to linger.
So, potential buyers, is a sizable tax credit combined with a screaming low interest rate enough for you to consider buying a house this year? Or are you motivated to wait, believing that the market has not yet bottomed?
The effects of this artificial stimulus could come at an interesting time. Home prices generically across the Portland metro area are down 17% from the peak. Sales are stagnant.
I certainly think these incentives could spur a renewal of activity by those that are qualified, but I could argue that the Portland market has not had enough time to correct for its irrational, artificially fueled price run-up (I can hear home sellers screaming at me from the distance).
Another data point: Since Portland’s market has paralleled Seattle’s performance over the past several years, it’s interesting to compare. One respected agent believes Seattle is at the bottom, noting that non-distressed homes are moving when priced at 80% of their peak price. Distressed properties are selling closer to 40% off the peak. Is Portland far behind?
UPDATE (02/11/2009):
It appears the $15K tax credit incentive is off the table, discarded as a bargaining chip in the larger stimulus package negotiation.
Photo by sbluerock, used under Creative Commons license.
Camera Friendly? HGTV has a role for you
My First Place, one of HGTV’s gazillion home shows, is coming to Portland to shoot soon.
From their invitation:
We are looking for fun, high-energy people who are just starting the home-buying process for their first place! Our goal is to capture all the trials and tribulations of looking for, bidding on and buying your first place.
Ideal candidates will be enthusiastic buyers with a great story to tell and a desire to share their experiences. Singles, couples and families are all invited to apply!
Interested? Call Jon Kawano at (303) 712-3222 or email at JKawano@highnoonentertainment.com.
I’m ready for my close-up Mr. DeMille.
Hat-tip Marisa Swenson & PortlandNeighborhood.com.
