Bill Blanchard

For all of you who love data, here is some information about Kirkland.

The Case- Sheller index for January (released 3/31) still has values dropping about 3% a month for the Puget Sound area but the annual trend is slowing.

West of Market in Kirkland, WA as of April 2nd has about 56 homes listed for sale. Prices range from about $480,000 to $4.9 million.

WEST OF MARKET DATA:

With nine pendings and solds over the last six months.

Here are the overall trends for South Kirkland:

New data for March will be out soon.

As agents we are now being asked "What is this tax credit for first time home buyers?" Especially now that there are great deals and low interest rates. Here is some great in formation I got from my Title agent at Commonwealth Tile and Escrow.

Tax Credit at a Glance

• The tax credit is available for first time home buyers only(or for those who have not purchased in the last three years.)

• The tax credit does not have to be repaid.

• The tax credit is equal to 10% of the home's purchase price up to a maximum of $8,000.

• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Frequently Asked Questions

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.

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 homeownership 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.

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.

How is this home buyer tax credit different from the tax credit that Congress enacted in July of ‘08?

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.

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.

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.

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 the entire 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.)

As agents we are always asked "what can I do about my taxes?" Especially now that values have fallen in relation to their assessment. Here is some great in formation I got from my Title agent at Commonwealth Tile and Escrow.

The King County Assessor revalues all property in King County each year, notifying property owners of their new value determinations by mail on Official Property Value Notice cards.

The Assessor typically begins sending out these revaluation cards in April, finishing sometime in August. These new valuations will be the basis for the amount of taxes due the following year. Property owners who believe the new assessed value of their property exceeds its fair market value have the opportunity to appeal each year following receipt of the Assessor's revaluation notice by timely filing a petition to the King County Board of Equalization (BOE). Petitions must be received by the Board on or before July 1^st of the assessment year or within sixty (60) calendar days after the date listed on the Assessor's value change notice - whichever date is later. If submitted by mail, petitions must be postmarked by the post office no later than the filing deadline.

Filing an appeal with the BOE only requires the submission of two sets of the BOE's petition form. You can download this form off of the King County website listed below. While it is recommended that you provide the evidence you will use to support your appeal as early as possible, additional evidence may be submitted up to seven business days before your future hearing, which is typically several months after you file the appeal. There is no charge for filing an appeal.

If you feel a mistake has been made in valuing your property, it is recommended that you contact the Department of Assessments directly. Review your account information with the Assessor's staff to make sure an error has not been made. It's also a good idea to review the characteristics of the Assessor lists for your property to make sure important features such as the property's parcel size, area of the improvements (residence), views, etc., are accurate. If your objection to the assessed value is that you are being valued high relative to assessments of other properties, this may be due to errors in assessment records.

If errors are discovered, the Assessor may be able to correct the data and the assessment without an appeal to the Board. Once you have submitted your petition to the BOE, the staff will process your petition, send you an acknowledgement letter, and forward a copy of your petition to the Assessor's Office for their review and response. You should expect a response from the Assessor in two to six months, depending on the volume of appeals. Based on the evidence included within your petition, the Assessor may choose to recommend an adjustment in the assessed value. If this occurs and you agree to the Assessor's stipulated or recommended value amount, the need for a hearing

You are going to hear this phrase more and more as the housing market stabilizes. It means from the top of the market to the point at which we no longer see declining numbers.

Moody's says home prices in the United States will hit their low point in the fourth quarter of 2009, with the Case-Shiller Home Price Index expected to show a 36.2% peak-to-trough decline. The peak was reached nationally in the first quarter of 2006.

The Seattle Case-Shiller Home Price Index from January 1989 until January 2009.

The peak in Seattle was June 2006. If you follow the index, that means a home bought at the peak of the market in Seattle for $350,000 will ‘trough' at $233,009.

Today that home is valued at $257,080.

(A past Trough) Seattle Case-Shiller Home Price Index from November 1989 until December 1997

According to this theory, we will see another 5-6% decline from today before the trough starts. Home values will go back to March of 2003.

That means if you want to buy this home but are waiting for the bottom, it will bottom out for about $24,000 less than if you bought it today. At a 5.5 % interest rate, it's about $135 a month. A move of the rate a one point adds/subtracts about $15 a month.

I believe our market will trough during May of this year and because of a shortage of new construction, starting in September will will experience an inventory shortage.

The Case-Shiller Home Price index will prove me right or wrong but not until July 20, 2009 and we will start see facts pointing to the shortage in, well, September.

The Kirkland, WA Google Lakeview Office Complex.

The plan to build the Google offices in Kirkland started years ago. It sounded great for everyone, especially the Eastside Real Estate Market.

The rumor was that Google had grown and matured as a company and now had 100's of middle mangers and directors. They could not all make millions a year but they made good six figure incomes. However, around San Francisco and Mountain View California, six figures doesn't buy much. So the plan was to move some of this group to Kirkland where their salaries could buy nicer homes and schools for their children. All this while being close to the Microsoft brain trust and just a short flight back to the mother ship.

Click ahead to 2009. At a recent Bellevue Chamber business lunch the bad news came from Peter Wilson, Google site manager for its Kirkland offices. Peter said things have changed.

Basically, we are going to have a much scaled down version of the original plan. "As we enter this recession, we need to be prudent about how we manage our costs," Wilson said. "I started to have trouble trying to find work for all of these people."

The Kirkland Reporter can give you the details.

But according to Wilson, Google chose to open an office in Kirkland when two sought-after recruits refused to move to California contradicting the rumor that I talked about earlier. I guess you can't believe all the rumors, especially the ones about real estate.