Single-family home sales in Weymouth, Massachusetts increased 45.6 percent in the first quarter compared to Q1 2008, climbing from 46 sales to 67. Sales were up from 66 in the first quarter of 2006 and down from 74 sales in the first quarter of 2007.
The median price of a single family home in Weymouth, MA remained nearly unchanged at $285,000, up just slightly from $284,950; however, the median price is down 16.1 percent from Q1 2006 ($339,950).
The average number of days on the market remained the same at 116, which was also the average number of days on the market in the first quarter of 2006.
Median Price Number of Sales Days on the Market
Q1 2006: $339,950 66 116
Q1 2007: $314,750 74 136
Q1 2008: $284,950 46 116
Q1 2009: $285,000 67 116
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Compared to the first quarter of 2006, the median price of a single-family home in Haverhill, Massachusetts declined 23.9 percent in the first three months of 2009.
Compared to the first three months of 2008 ($270,500), median price was down a modest 5.76 percent in the first quarter of 2009 ($254,900). Home sales declined from 70 in Q1 2008 to 55 in Q1 2009, a decline of 21.4 percent. Home sales rose in Haverhill in 2008.
After declining from 148 days to 132 days in 2008, the average number of days on the market for a single-family home during the first three months of 2009 rose to 173.
Median Price Number of Sales Days on the Market
Q1 2006 $335,000 85 112
Q1 2007 $302,500 68 148
Q1 2008 $270,500 70 132
Q1 2009 $254,900 55 173
The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.
The 2009 home buyer tax credit is much improved compared to the 2008 version.
The following questions and answers, created in part by the National Association of Home Builders, provide basic information about the tax credit. If you have more specific questions, I strongly encourage you to consult a qualified tax adviser about your unique situation. The following is for informational purposes only.
1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home, new or resale, are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit; however, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
3. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
4. Are there any income limits for claiming the tax credit?
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
5. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
7. Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
.Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax adviser for information relating to your specific circumstances.
8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit; however, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
9. How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary; however, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
10. What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
11. I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax adviser to ensure you file this return properly.
13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.
16. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
17. Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
18. I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit.
19. Is there any way for a home buyer to access the money from the tax credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment.
Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a down payment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
Read another FAQ list about the tax credit created by the National Association of REALTORS®.
Also visit FederalHousingTaxCredit.com.
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Single-family home sales in Massachusetts dropped 10.3 percent in January while median prices plummeted by 20.2 percent compared to January 2008, The Warren Group, publisher of Banker & Tradesman, reported February 24, 2009.
The Massachusetts median home price dramatically dropped to $259,250 from $325,000 in January 2008. January marked the fifth consecutive month that single-family median home prices have been off by double-digit percentages. The $259,250 median price is the lowest it’s been since March 2002.
There were 1,908 single-family home sales in January, down from 2,126 in January 2008. It was the lowest sales volume for the month of January in the 22 years that The Warren Group has been tracking the Massachusetts residential real estate market.
Condominium sales hit a 17-year low for the month of January. There were 806 condo sales statewide in January, a 29 percent decrease from 1,136 during the same month in 2008. The median condo price fell 22.2 percent to $209,900 in January from $269,950 a year earlier.
Condo prices are finally starting to weaken after holding up much better and longer than single-family home prices.
The Massachusetts Association of REALTORS® (MAR) reported similar numbers. The MAR said that single-family home sales were down 12.5 percent in January, and the median selling price for single-family homes declined 17.9 percent compared to January 2008.
The median selling price for single-family homes in January was $263,500 compared to $321,000 in January 2008.
The MAR and The Warren Group uses slightly different methods to calculate median price and report sales.
Condominium sales were down 26 percent in January compared to the same time last year, MAR reported. The median price for a condominium was $204,000.
The MAR reported that inventory of residential properties on the market as of January 31, 2009 decreased 20 percent compared to January 2008 (from 44,540 listings in 2008 to 35,459 listings in 2009). At the current sales pace, the number of properties on the market represents approximately 15 months of supply, a decrease from 15.7 months of supply in January 2008. On a month-to-month basis, the average months of supply is up from 10.0 months in December 2008. It is considered a balanced market when there are between 7.5 and 8.5 months of supply.
The inventory of single-family homes decreased 19 percent from January 2008 (30,559 listings in 2008 to 24,822 listings in 2009). That translates into 14.3 months of supply in January 2009. Supply is down from 15.4 months last year and up from 9.6 months of supply in December 2008. January was the 10th straight month that inventory has gone down compared to the year before, and single-family home supply is at its lowest level since February 2005.
The condominium market saw January decrease by 24 percent decrease in inventory, (13,981 listings in 2008 to 10,637 listings in 2009), which translates into 16.9 months of supply, up from 16.4 months in 2008 and up from 11.3 months this past December. Condo inventory is at its second lowest level since December 2004.
Detached single-family homes stayed on the market an average of 146 days in January 2009 compared to an average of 143 days in January 2008, while condos stayed on the market an average of 179 days, up from an average of 165 days in January 2008.
The median price of a single-family home in Acton, MA rose 0.75 percent in 2008 compared to 2007, rising from $549,900 to $554,053.
The median home price in 2005 was $614,116.
Home sales in Acton, MA declined 10.1 percent in 2008, falling from 167 sales in 2007 to 150 sales. Single-family home sales are off 26.8 percent compared to the 205 sales in 2005.
The average number of days on the market declined 24.8 percent in 2008, falling from 121 days in 2007 to 91 days.
The data comes from MLS Property Information Network, Inc., the multiple listing service used by local real estate professionals.
Acton, Massachusetts
Single-family Market Data
Jan. 1st through Dec. 31st
Year No. of Sales
2005 205
2006 183
2007 167
2008 150
Year Median Price
2005 $614,116
2006 $567,500
2007 $549,900
2008 $554,053
Year DOM
2005 82
2006 96
2007 121
2008 91
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