Jennifer Kirby, the Luxury Agent

I dove into the Stimulus Plan on the House Appropriations website to try and find out what kind of agreement the Senate and House of Representatives came to regarding the First Time Home Buyers Tax Credit. Not the most fun reading, but extremely important to know about for any serious real estate professional.

Currently, a taxpayer who is a first time home buyer (someone who has not owned a home within the previous three years) was allowed a refundable tax credit of the lessor values of $7500 or 10% of the purchase price of the home. The credit was allowed for homes purchased between April 9, 2008 to July 1, 2009. However it would have to be repaid, interest free, over a period of 15 years, or recaptured at the time of sale.

The stimulus package modifies the current rules, but also keeps the following in place:

• the tax credit phases out for individual tax payers you have a modified gross income of $75,000 to $95,000 ($150,000-$170,000 for joint filers)


• tax payers can claim the purchase of a home on their 2008 tax return (thus the reason for the credit beginning on December 31, 2008), even if they buy their home, for example in January of 2009

The new agreed to provisions that go into effect December 31, 2008 and are:

• extends the current home buyer tax credit for qualifying home purchases to December 1, 2009


• increases the maximum credit to $8000 ($4000 for a married person, filing separately)


• waives the recapture of this tax credit for homes bought between December 31, 2008 to December 1, 2009


• if the home is sold, or ceases to be the primary residence, within 36 months of the closed date, then the rules of recapturing the tax credit apply (currently over a time period of 15 years)

The part that really stinks about the revisions is for the first time home buyers who closed on their home between April 9, 2008 -December 30, 2008. It appears they will still need to repay the tax credit of $7500 over a period of 15 years, just as originally written, and none of the new revisions will apply to them.

Don't worry though, at least you get a tax credit. We closed on your new home in March 2008, and even though we are only 30 days out for qualifying, no soup for us!

The other day we got a misty snow early in the morning which coated the trees with glimmering snow. As the sun was rising, I decided to turn down a rural lane on the way from dropping my son off at pre-school and take some shots.

Twin Cities Luxury Market stats compared to the National Luxury Home Market

New data is out for the Twin Cities Luxury Home Market and it looks like the upper tier of homes is inching toward the national average. While it is still a buyer's market, buyer's are beginning to come out of the woodwork, getting over the fear seen across the national market, and are starting to purchase high priced homes again.

From speaking with some local buyers, they feel now is a great time to buy as luxury home prices have come down drastically in the last two years. While some are still wary, many are looking to negotiate with sellers, and sellers are now willing to listen to their wants and needs. Here are some local numbers for the luxury home market in the Twin Cities.

• Average Price: $850,615
• Average Square Feet: 3739
• Number of Homes for Sale : 781
• New Listings: 24
• Sold Homes: 39
• Average Days on the Market (DOM) : 153

Below are some market graphs, illustrating luxury home trends over the last year for the Twin Cities. Of course, the huge dip at the end is for December, a month which typically always produces a slower market. Stay tuned over the next few months as winter draws to an end, and the Spring buying frenzy begins, to see how the market will change for 2009.

Average prices for the upper tier having been inching up since May 2008

As soon as Fall hit the Twin Cities, available Inventory has declined

Over the last five months, the average days it takes a home to sell has increased by 40 days

When shopping for a new home, especially if you are a new home buyer, it is important for you think about what you want before you buy. One thing I have my clients do before we go house hunting is to sit down and make a list of the things they MUST have in the new home, and the things that would be nice to have, but don't really need if it came down to a hard decision. By going through the action of putting something on paper, a home buyer is forced into reality.

One reality often discovered is the fact that two home buyers may not want the same things. Take for instance a couple I worked with recently. The husband was happy with a home that needed a little work because the home was in a good location and would hold its value in the future. Any updating they did would only add more future value to the home. The wife however would rather buy a completely updated home and pay more for it now. Every home we entered was picked apart by one or the other. Needless to say, they were not on the same page.

It came to a point when I stopped the process and asked them to sit down at a meeting. I told them it seemed they were not ready to buy a home because they didn't really know what would work for the BOTH of them. If they cannot agree or compromise on the amenities they want, then what was the point of wasting everyone's time. Funny enough, they both agreed that a huge talk was in order. One week later, they came back to me with a revised list of "have and have-nots"...we found a home with-in a few days that both loved. Once they faced the reality of the decision making process, they found something both could live with.

In other cases, I have shown buyers what they think they wanted, only to find out it was the exact opposite. In instances like this, it works out really well if I show them two extremes in their price range, and then they can tell me which better suits them...kind of like telling them to rate a home between 1-10.
Here are some things to consider when buying your next home:

• Location - many people just can't compromise on this, but if you can't afford the neighborhood or town you want to live in, then go further out to a neighborhood you like and can afford


• Price Range - make sure you can afford the homes you view. Don't even think about looking at homes outside your price range that you could only afford with a low ball offer. It wastes every one's time.


• Lot - think about if you want a large lot, small lot, trees, etc. Do you love to work in the yard? Do you hate to mow grass? Figure this out and you can greatly narrow down the homes to view.


• Wood - do you hate oak cabinets? Now a days, many home buyers do and want different types of wood in the home. You will have to think about replacement costs for any wood you hate, or if you even want to go through the hassle. I know I hate oak and wouldn't even consider a home with these types of cabinets...unless it was for the right price.


• New vs. Old - This is a big decision factor. In today's real estate market, new construction home builders are giving some pretty good incentives that rival resale homes. It could be a good way to go, especially if you would like help with closing costs as some builders are offering up to $7500 toward these costs.

So the bottom line is this, KNOW what you want BEFORE you go house hunting. And if there are two or more people involved in the decision making process, take a look at the reality of your situation and find a happy medium in which all of you can live with.

* I orginally featured this home on my luxury blog, last April. Since then, the home even looks worse when you drive by it, which is what I did today. Sparkly winter snow doesn't even help.

This weeks featured historic home is located at 475 Summit Avenue in Saint Paul, MN.

Why is it that I am always saddened when I walk by this home? Probably because it looks to be slowly deteriorating, but I could be wrong. Originally built somewhere between 1880-1883, this simple Queen Anne was commissioned by James Gamble, and designed by George Wirth. Mr. Wirth built six homes on Summit Avenue.

The exterior is constructed of stone, the home has most of its original features. The front bay window on the second floor has been altered, but the most significant change came to the front porch, only a decade after it was built. The Victorian styled lattice porch was changed to a more Richardson Romanesque style porch made of stone, which can be seen in the photos below.

Here are some photos of the home as it appeared in 1888, 1890, 1900. According to public records, the home has over 7000 square feet with 10 bedrooms. It is currently used as apartments.