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The First Time Home Buyer Tax has been extended and expanded. So much so that calling it by that name is only half the story. As an amendment to an unemployment insurance bill, a RPAC endorsed extension and expansion of the current home buyer tax credit unanimously passed the Senate late Wednesday and the House of Representatives on Thursday. President Obama signed the bill on Friday. To summarize the new bill, first-time home buyers will still be able to claim the $8000 tax credit until April 30, 2010. In addition, closing the sale isn't required prior to the deadline. This credit would apply if a binding contract is in place by April 30, 2010; buyers have an additional 60 days to close the sale. In addition, current homeowners who have maintained the home they want to sell as their primary residence for five of the last eight years are also eligible. In those cases, the maximum credit is lower: $6,500 or 10 percent of the sale price, whichever is least. The previous credit included income caps of $75,000 and $150,000 for individuals and couples. The new bill lifts those caps to $150,000 and $225,000 for individuals and couples, respectively. The new version does, however, cap the purchase price of homes purchased; the credit may not be claimed when the purchase price is $800,000 or greater. There are several other minor changes to the current credit through this legislation. You can see a side-by-side comparison of the two bills by clicking here. |
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Extending/Expanding the Home Buyer Tax Credit |
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Senate leaders from both parties have agreed to extend and expand the First Time Home Buyer Tax Credit that is set to expire at the end of November. Unfortunately, an agreement doesn't count as a vote. The hold up? Senate procedures and a legislative vehicle. The agreement is currently in the form of an amendment to an Unemployment Insurance bill. The Senate is expected to vote this evening for a "Motion to Invoke Cloture." If 60 Senators vote yes on the cloture motion, the Senate will then be able to schedule a vote on the bill that contains the amendment. Once the Senate acts, the tax credit must still go to the House of Representatives for action. If passed by both houses of Congress unchanged, the amendment would: EXTEND: - The current credit until April 30, 2010. However, this deadline would apply for sales contracts; closings would have to be finalized by June 30th. Senator Johnny Isakson (GA-R), sponsor of the amendment, is quoted as saying "The American people should understand this -- and the affected industries -- this is the last extension. Tax credits like this only work by creating the sense of urgency to take advantage of them." EXPAND: -The amendment offers an additional tax credit of $6,500 to any home buyer who has lived in their current home for at least 5 years. OTHER DIFFERENCES: -Homes being purchased for more than $800,000 would not be eligible for the credit. -Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit. -To combat fraud, a HUD-1 Settlement Statement will have to be attached to the tax return to secure the credit. Claimants must also be 18 years old. As with any piece of legislation, all of this could change at any minute. Once passed by the Senate, it could change or die in the House of Representatives. The Obama Administration has endorsed the current amendment. |
Chris Castetter quoted in the Hendricks County Business Leader...
Everyone knows how dismal the housing market has been recently. Chris Castetter knows. He is a Realtor. He is also a small business owner and knew he had to do something. "You have to change with the times or fall through the cracks," he says. As the downturn continued, Castetter asked himself, "What is it going to take to set me apart?" He researched successful agents nationwide and interviewed them. "I educated myself (to know) what it means to have a website and how to drive traffic to it"
Castetter says. He uses his website to educate consumers and keep them informed. "The marketing for sales is mostly web-based now," he adds. Castetter also reassessed how he worked. As a result, he hired another agent to concentrate on homebuyers, so he could concentrate on sellers. He established a partnership with Home Matters, LLC, a professional home staging company and added a consultation for all of his listing clients. Administratively, he hired an assistant. Now he spends most of his time working with clients and building his business.
"I determined what I had to do to survive, and thrive in this economic climate. The foundation of my past clients was and is my saving grace (in the beginning), and now I am meeting new people I may never have had contact with (through my website)." He credits the strategic changes made in his business for making 2009 his strongest sales year to date. Score one for small business. He can be contacted through www.chriscastetter.com or at (317)414-1117.
Three counties show improvement in Central Indiana housing market
July statistics point to areas with improved sales, overall shrinking inventory
HENDRICKS COUNTY - While overall pended home sales remain lower on a month-to-month and year-to-date basis in Central Indiana, three Indianapolis-area counties reported higher sales than the same time last year, according to pended sales statistics compiled by F.C. Tucker Company.
July pended home sales in the nine-county area were down 3.1 percent overall with 2,267 homes pending compared to 2,339 in July 2008. Johnson County posted a 1.3 percent increase, followed by Marion County and Hamilton County, with 1.1 percent and .7 percent increase, respectively. Year to date, overall pended home sales are down 9.1 percent compared to the sametime frame in 2008.
Housing inventory in Central Indiana continued to drop in July with 16,223 homes on the market in the nine-county region, 3,267 fewer homes than in July 2008 - a 16.8 percent decrease overall in inventory. Marion County was the only county to experience above average inventory declines with a 21.5 percent decrease.
"While the Central Indiana real estate market continues to stabilize and improve, I believe the momentum we've gained in the past few months will carry through to the end of the year," "The economy is picking up, and we're seeing the light at the end of the tunnel."
Average year-to-date home sale prices, down 11.8 percent from the July 2008 year-to-date figures, have shown a steady improvement since January 2009. In January 2009, the average year-to-date home sale price was $118,438; in July 2009, it was $136,943.
A recent USA Today survey indicated two-thirds of economists believe existing-home sales have hit bottom. Also, consumer spending has stabilized. Such signals are prompting 37 percent of economists to predict a moderate or fast recovery.
Quick Links:
Pended single-family and condominium home sales
Sale Price
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County |
YTD July 08 |
YTD July 09 |
% Change |
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Boone |
$257,359 |
$224,708 |
-12.7% |
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Hamilton |
$251,116 |
$224,758 |
-10.5% |
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Hancock |
$140,076 |
$129,801 |
-7.3% |
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Hendricks |
$161,859 |
$159,435 |
-1.5% |
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Johnson |
$147,717 |
$137,560 |
-6.9% |
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Madison |
$77,603 |
$70,356 |
-9.3% |
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Marion |
$106,589 |
$101,822 |
-4.5% |
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Morgan |
$135,201 |
$122,492 |
-9.4% |
|
Shelby |
$103,174 |
$79,466 |
-23.0% |
|
Average |
$155,240 |
$136,943 |
-11.8% |
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Month |
YTD Average Sale Price |
YTD % Change from Prior Year |
|
Jan-09 |
$118,438 |
-12.6% |
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Feb-09 |
$120,880 |
-12.6% |
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Mar-09 |
$123,461 |
-12.4% |
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Apr-09 |
$123,813 |
-11.9% |
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May-09 |
$129,672 |
-9.5% |
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Jun-09 |
$135,408 |
-6.9% |
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Jul-09 |
$136,943 |
-11.8% |
Note: All statistics were compiled by F.C. Tucker Company from a report drawn from Propertylinx statistics on August 7, 2009. Pending means the sales contract has been signed, but the transaction has not closed. According tothe NAR, pending sales typically are finalized within a month or two of signing.
Yesterday, the IRS updated information on their web site to include a revised Form 5405, the form used to calculate the credit available. Below is a link to an IRS web page that has additional information on the credit and a link to the form.
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
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chriscastetter.com is a native of Hendricks County Indiana & is The Local Real Estate Expert in the area. Selling Avon, Plainfield, Brownsburg and all of Hendricks & West Marion CountY
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