Pennsylvania

Looking at the Market Update for October 2009, the real estate market seems to be improving in the Lehigh Valley in Pennsylvania. Here are the statistics:

During October 2009, 537 sales were reported, which is up about 2.1% from September 2009 at 526.

The average sales price for October 2009 decreased about 4% at $190,000 as compared to September 2009 at $198,000.

The median sales price for October 2009 was recorded at $173,000, which is a decrease compared to September 2009 with a median of $177,000.

The average time on the market for properties sold during October 2009 was 78 days, which is an increase compared to September 2009 at 74 days.

Ten new construction properties sold during October 2009, while only 7 sold in September 2009. The average sales price for newly constructed homes with 4 bedrooms and 2 1/2 baths in October 2009 was $451,000 while in September 2009 the average sales price was recorded at $379,000. The median sales price for October 2009 for new construction was $410,000 as compared to $356,000 in September 2009. That's good news for new construction in the Lehigh Valley.

October Sales Distribution

Sale Price Number of Sales
Under $70,000 56
$70,001 - $100,000 31
$100,001 - $150,000 120
$150,001 - $200,000 142
$200,001 - $250,000 84
$250,001 - $300,000 41
$300,001 - $350,000 25
$350,001 - $400,000 17
$400,001 - $450,000 5
$450,001 - $500,000 4
$500,001 - $600,000 6
$600,001 - $700,000 3
$700,001 - $800,000 2
$800,001 and above 1

YEAR IN REVIEW

Comparison of Activity from October 2008 to October 2009

During October 2009, 537 sales were reported, up about 30% from October 2008 at 413.

The average sales price for October 2009 was recorded at $190,000, down about 10.4% from October 2008 when the average sales price was recorded at $212,000.

The median sales price for October 2009 was recorded at $173,000 which was a decrease compared to October 2008 with a median price of $182,000.

The average time on the market for properties sold during October 2009 was 78 days, an increase from 71 days in October 2008.

First Time Home-buyer Tax Credit Extended Into 2010!

Plus...A New Tax Credit for Certain Existing Home Owners!

It's official. President Obama has signed a bill that extends the tax credit for first-time home buyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Home-buyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individuals primary residence.

What is the tax credit for first-time home-buyers (FTHBs)?
An eligible home-buyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time home-buyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any questions that fall outside the situations here, give me a call and if you do not have an accountant to speak with, I can refer you to one.

Please call me to help you buy or sell your home .

Let HelpfulHannah Help You!

It's official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any questions give the Barb Silcox Team at call at 215-738-6606 or email us at Bud@Silcoxteam.com.

DID YOU KNOW THAT IN THE AVERAGE HOME

34.5% OF EVERY DOLLAR IS GOING TO INTEREST ON DEBTS!

IF

WE COULD SHOW YOU HOW TO DRASTICALLY REDUCE THE AMOUNT OF INTEREST YOU ARE SCHEDULED TO PAY ON YOUR CURRENT DEBTS

& AT THE SAME TIME ELIMINATE YEARS OFF THOSE DEBTS,

WOULD THERE BE ANY REASON WHY YOU WOULD NOT TAKE THE NEXT STEPS TO FINANCIAL FREEDOM WITH UNITED FIRST FINANCIAL^®?

Contact us today !

What would your life be like today with your existing income but no mortgage or debt of any kind?

What Could You Accomplish if you were financially free?

Robert E Lee graduated 2^nd in his class at West Point (class of 1829). The man who graduated 1^st (Charles Mason) never joined the military. He became an executive with the railroads that aided the Union.

The sniper unit Berdans Sharpshooters consisted of 482 men, during the battle they fired over 14,400 rounds

New York placed 128 monuments of Gettysburg battlefield, surpassing Pennsylvania which placed 123

The house that served as Robert E Lee's headquarters was owned by Congressman Thaddeus Stevens, who rented it to a widow named Mary Thompson who lived there during the time of the battle.

Before the Civil War Union Gen. Dan Sickles shot and killed the son of Francis

Scott Key in Lafayette Park in Washington DC. Keys son was having an affair with Sickles wife. Sickles was acquitted of the murder by using the "Not guilty by reason of insanity" defense, becoming the first person in the country to successfully use the defense.

Enjoy these tidbits of useful but interesting information, and come back again for more updates in the future.