Christina Dowell Realtor, Central MA

Worcester MA real estate report: May 2009

Single family homes

Average sale price in Worcester, May 2009: $180,706
Average days on the market May 2009: 140 days
Number of properties sold May 2009: 43
Number of properties under agreement May 2009: 81

Statistics from May 2008

Average sale price in Worcester, May 2008: $209,736
Average days on the market May 2008: 152 days
Number of properties sold May 2008: 75
Number of properties under agreement May 2008: 0

Sale prices have declined by 14% since May last year and the amount of homes sold is also down. However, there is a significant increase in the number of properties under agreement to sell as compared to last year. A nice sign that buyers are out there!

Real Estate in Central Massachusetts Worcester Property Management LLC is a full service realty firm who specializes in buying and selling real estate in Worcester County and central Massachusetts. Worcester Property Management LLC also offers condo association management and apartment rentals. Visit www.worcestermanagement.com for more information.

Information on $8000 federal tax credit

Buy a home in 2009 and take advantage of the federal tax credit!

Basics on the program:

Who can receive the credit?
Only first-time home buyers are eligible and they must close between January 1, 2009 and December 1, 2009. Investors or people purchasing a second home can not receive this credit.

Who is a first-time home buyer?
A buyer who has not owned a principal residence in the 3 previous years before buying a home. If you are married taxpayers, neither you nor your spouse can own a primary residence.

How is the amount of the tax credit determined?
It is limited to 10% of the sales price of the home, but a maximum of $8,000.

What are the income limits on people claiming the tax credit?
For single taxpayers the income limit is $75,000 and for married taxpayers filing a joint return it's $150,000.

How do I claim the tax credit?
Simply claim it on your federal income tax return; just fill out IRS Form 5405 to help you know how much to claim and write it on Line 69 of your 1040 income tax return. No other forms are required.

An important difference between this tax credit and the $7,500 credit put into effect July 2008, is that this $8,000 does not have to be paid back! The only stipulation is that you must live in the home as your principle residence for at least three years, if you don't you will have to pay back the credit.

The average 30-year fixed mortgage stayed constant at 5.34% for the week ended Feb. 18, according to Bankrate.com.

Industry leaders expect the rates will remain in this range for a while.

What does this mean? If you are thinking of buying a home, talk to several banks first to determine what loan programs you qualify. Once a bank pre-approves you for a mortgage, run your own budget numbers to determine what you are able to pay each monthly comfortably. Then call a Realtor and begin looking at the properties in your price range.

With real estate prices at the bottom of the market and interest rates low, it is an excellent time to buy. There is a lot of inventory on the market so it is in your best interest to work with a Realtor to help you narrow down your search.

Source: Cnn online, by Les Christie "Mortgage help: do you qualify?"

Many clients are asking me about President Obama's new housing foreclosure plan. I found this article, which outlines the main points clearly. Bottom line, talk with your lender to see if you qualify.

NEW YORK (CNNMoney.com) -- President Obama's eagerly anticipated foreclosure prevention program went into effect on Wednesday. It targets 9 million borrowers for help - are you one of them?

The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions:

First, the government is aiming to help more homeowners refinance into new low interest rates.

Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels.

Here's how to know whether you'll likely be able to take advantage of either of these options.

Help for those seeking refinancing
This part of the program targets borrowers who have kept current on their mortgages. Many in this group have been unable to lower their housing costs through refinancings because of falling home prices. Right now, if you're "underwater" on your mortgage, meaning you owe more than the home's market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must, unless you're using an FHA loan.

The new guidelines should help. Even homeowners with a mortgage that exceeds home value by 5% could be eligible. And there will be no prepayment penalties. But your loan must be owned by Fannie Mae or Freddie Mac. The government is still working on getting other loan servicers to participate. Since lenders working with Fannie and Freddie already have most of the borrower documentation they need, the refinance process should go quickly.

And, in some cases, lenders may not need to reappraise properties because borrowers cannot take cash out on these transactions; they're only allowed to refinance the balance they owe.

The Administration estimates that this program, which will be in effect until June 2010, will help 5 million homeowners.

Who's not eligible?
Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck.

Those with "jumbo" mortgages also don't qualify. Only those who took out "conforming" loans - currently defined as mortgages of less than $417,000, except in certain high-cost areas such as New York City - from Fannie or Freddie would be able to refinance.

All borrowers will have to prove they have sufficient income to be able to keep up their loan payments. Mortgage modification help for at-risk borrowers Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans. Anyone at risk of default, such as those suffering serious hardships, income loss, increases in expenses, payment "shock" (such as when interest rates jump), high mortgage debt compared to income, who are underwater or who show other indications of being at risk of default, may be eligible for modification.

The mortgage must have originated before Jan. 1, 2009, and the unpaid principal can amount to no more than $729,750 for a single family home (more for a home with two-to-four units).

Borrowers with other debt, such as car loans and credit cards, exceeding 55% of their incomes, may still qualify for a modification, but they'll be required to accept debt counseling in a HUD-certified program.

If you qualify, your servicer - the company that administers the loan and to whom borrowers make their payments - or lender will reduce your monthly mortgage payments to 31% of your gross income. The reduction would come mostly through interest-rate reductions - though rates can be lowered no more than to 2% - or by extending the length of the loan to 40 years. In some cases, principal reduction also would be an option. The reduced payment would stay the same for five years and then gradually revert back to the conforming loan rates in place at the time of the modification, increasing by no more than 1% a year.

Borrowers would also receive incentive bonuses, in the form of principal reduction, of up to $1,000 a year for five years for making payments on time. Servicers who participate are required to modify all eligible mortgages under the program unless they are specifically prohibited from doing so by the contracts they have signed with investors, who are the actual owners of the notes. In those cases, lenders and servicers have to make good-faith efforts to obtain permission from investors to make the modifications.

President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures. Eligibility for the program will sunset at on Dec. 31, 2012, and borrowers may tap the program only once.

Servicers who want to participate must sign up by the end of this year.

Who's not eligible? Speculators, those who bought homes for investment purposes, do not qualify for help because the property must be owner-occupied. No investor, vacant or condemned properties are eligible. Occupancy will be verified through a credit report and other documentation. The program will also not reward homebuyers who were irresponsible in their borrowing.

All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify. To protect taxpayer money, modifications must make sound financial sense.

Servicers are required to apply a "net present value test" on the loans at risk of immediate default or that are 60 days or more delinquent. If the test determines that the value of the loan is enhanced by doing a modification compared with allowing the loan to go into foreclosure, the lender will proceed with the workout. That will disqualify many borrowers who simply can't afford any reasonable mortgage payment. "[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford," said Obama, when he announced the program two weeks ago. "In short, this plan will not save every home." You can contact your lender starting March 4 to see if they are participating in the program. Federal officials have also posted additional information for at www.hud.gov, including a "self-assessment" option to see if you qualify.

Come hear the U.S. Air Force Band of Liberty play at Mechanics Hall, Worcester today at 12PM! These 60 musicians, stationed at Hansom AFB, will bring you to your feet with their spectacular holiday show. Filled with patriotic songs and sounds of the season as well as American Songbook favorites this concert is sure to make your hearts be merry and bright!

Bring your own lunch or purchase one at the Hall prepared by Eric's LaPatisserie Cafe!

Sponsored by Bank of America. Concerts broadcast when possible on WICN 90.5FM.

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Real Estate in Central Massachusetts
Worcester Property Management LLC is a full service realty firm who specializes in buying and selling real estate in Worcester County and central Massachusetts. Worcester Property Management LLC also offers condo association management and apartment rentals. Visit www.worcestermanagement.com for more information.