Claude Labbe, ABR, e-Pro, GRI

Across the US, "First Time Homebuyers" are getting a great tax benefit in 2009. To be considered a First Time Buyer in the view of the IRS, you are defined as one who has not owned a home in the prior 3 years.

In Washington, DC, since 1997, "First Time Homebuyers" get a great tax benefit. To be considered a First Time Buyer in the view of the DC Tax authorities, you are defined as one who has not owned a home in the District before. If one owned a home elsewhere, one is still eligible.
IRS Tax credit is for $8,000; DC Tax credit is for $5,000.

Both phase out with higher incomes. Either credit may be used for a buyer in the District in 2009, but NOT BOTH. This is my understanding as I read the NAR guidelines, though I would strongly urge discussion with your accountant.

By the way, First Time Buyers across the US is IRS Form 5405 for $8000, while DC is IRS Form 8859.

Hi all,

This note applies to people who want to buy in 2009, and to people who want to sell in 2009. The logic simply dictates when you start buying or when you choose to put your home on the market.

This note also only applies to buyers who are first-time buyers (ie, no home ownership in prior 3 years), and so, also then only to home sellers who's home would likely appeal to that buyer market.

At the moment, this market is crazy, as bad as 2004. Buyers spend their weekends looking at homes, buyers then make offers at above-asking price. Sellers get to entertain several offers and take their pick.

That's the Washington DC market in the spring of 2009.

I cannot foretell the future, but what do you think will happen this fall, when everyone is racing to get closed/settled prior to Dec 1, 2009 to qualify for their $8,000 tax credit? I think people will get more crazy, prices will shoot up. After Dec 1, we should get back to normal.

So, if you are a seller and can afford to wait until September to sell your home, you'd be best advised to stay put.

So, if you are a buyer thinking on buying this fall, be forewarned.

[yes, I've been swamped for the past month; not at all what you'd expect from Realtors®]

I don't 100% agree with the recession simply because while I fully see it's impact, I also see many people who have not been impacted, and I see several neighborhoods where prices are stable (though, yes, I see many where prices have taken the express elevator down)

I do like Richard Florida's thinking and was recently listening to a discussion he had on NPR. I've included it here (as well as the original Atltantic Monthly article) and he speaks almost tangentially about the Washington DC area.

Regardless of larger economic forces, real estate has been, and continues to be about location. (I can't say it 3 times, but you know I want to). Location involves the home, schools, jobs, transportation, the whole basket.

I came across an organization today which may have a good idea.

I'm not an economist, and I didn't support the bailouts, but at some point, I've come across to the other side. However, it does seem like the current economic distress did start with housing, and I've not seen those problems addressed.

Check out this advocacy group..Fix Housing First

Auctions…they are just so 19^th century, right? Several months ago, I went to one with a buyer, for a home she had in mind in Reston, VA. She had a budget. Auction bidding went right past it. She eventually got a home on the street that she also loved, though at a higher price.

There are auctions every month or so, by different companies, for multiple properties. If the auction meets my buyer’s criteria, I will help them out. My goal is for them to buy a home, and any valid means which get us there are viable. You also will see individual homes that are auctioned off, and whether it’s a single or a multiple sale, the arguments for the buyer are the same.

With the buyer who is considering an auction, my role is similar to any other buyer. My role is to provide information on the home, similar to what I would in creating a set of buyer comps; to assist the buyer in understanding what the home is worth, regardless of asking price. Sometimes, the home in the auction is also on the market in the MLS, though usually at a much higher price. Nonetheless, that is an opportunity to get into the purchase sooner, and some homes slated for auction do get sold prior to auction. Often, I can obtain access and more information on the homes being auctioned. The more information I can find and interpret, the better informed my buyer’s auction preparation will be.

I went to another auction today, with another buyer. This particular buyer was looking for investment property in Washington DC. So, that was all I focused on. My data are at the bottom, but my conclusions:

• If the first winning buyer can’t complete the purchase application process, stick around, there were some good price drops.
  e.g., $135,000 first bid, re-auctioned 60 minutes later for $90,000 (Waldorf)
  e.g., $130,000 first bid, re-auctioned 60 minutes later for $90,000 (Waldorf)
  e.g., $57,500 first bid, re-auctioned 30 minutes later for $52,500 (2420 T St SE)
• Forget the massive audience, only a few people are fighting with you for the property
• And most properties can be picked up at a steep discount from the MLS asking price

There is an auction coming on Jan 30, just over 30 properties for sale in Washington DC. If you'd like that list, I can send it now, and expect to spend time on it in early January to flesh out the data more.

If you want to be ready, give me a call. And make sure your lender is on board with you so that your winning bid doesn’t get thrown out when you can’t finance the purchase.