The New Extended Home buyers Tax Credit.
We are already at years end, and what a year 2009 was. The beginning of the year we got off to a slow start because of lack of inventory and uncertainty under homebuyers. When the summer came around not only the temperatures starting to heat up but also the Home sales here in the desert.
More foreclosures, low interest rates, first time home buyers and a strong Canadian dollar where the causes for the high number of sales we have accomplished in the second half of this year.
In the last 6 months we have seen more buyers coming off the fence and taking advantage unbelievable opportunities here in the Palm Springs Area.
What will we see for 2010?
Interest rates will stay the same, the first time home buyer credit has been extended to mid next year, and a new wave of foreclosures will hit the market in the second and third week of January. We continue to get positive news on home sales. Real Trends reports that markets roared in October with the best year over year showings in all 4 years. The report shows that all regions were up in unit sales. Price declines are measurably less than they were than in the first 9 months of the year with every region showing improvement.
Much of this good news is the result of near record low interest rates and the federal and state first time homebuyer tax credit ...they are doing a great job of assisting the housing economy.
The extension of the credit through next spring should have a positive impact on housing sales through the 4th quarterof 2009 and the first quarter of 2010. And...the tax credit extension to move up buyers should provide additional stimulus to keep the housing market on the road to improving results.
What this means to buyers is that it is a sweet time to buy and for sellers, this is the critical point to make sure your properties show their best. Ladies Home Journal magazine just published a great article advising sellers to Donate instead of dumping their home goods to local charities. Streamlining the look of the property will help buyers, will help keep the economy green --and assist others in the process.
Let's talk about the new Extended Home buyers Tax Credit. It's NOT just for first time buyers
This program will touch a lot of people - it is very exciting!
Congress has extended the tax credit program to include current homeowners and repeat buyers, so expect to see some terrific opportunities in the months ahead. As you know, tax credits are a dollar-for-dollar reduction in your tax bill, so it's like getting free money from the US Government
Here are the program details.
Between now and April 2010, first time buyers are eligible for a tax credit of 10 percent of a home's purchase price, up to a maximum of $8,000. And as I mentioned earlier, current homeowners are also eligible for a tax credit when they sell and purchase another home. The homeowner tax credit tops out at $6,500. I know a lot of people will take advantage of this program.
What's the catch?
Well, there are a few conditions that buyers need to know about, including a couple of income restrictions:
The full tax credit is available to buyers earning up to $125,000 a year, or $225,000 for married couples filing jointly. If you make more than that, you may still qualify for some relief.
A partial tax credit is available to buyers earning between $125,000 and $145,000, or for married couples earning between $225,000 and $245,000. These increased limits allow more middle-income buyers to participate.
There are also a couple of limitations on the homes being bought and sold. First, the tax credit is only awarded on homes purchased for $800,000 or less. And second, homeowners who plan to take the $6,500 tax credit need to have lived in their current home for 5 of the past 8 years. This is a limited program that runs through the end of April 2010, which is only a few months out.
Fortunately there is a grace period -- Under the rules, as long as a written binding purchase contract is in effect on April 30, 2010, the buyer has until July 1, 2010 to close. So buyers and sellers need to get moving if they're going to take advantage.
Folks need to strike while the iron is hot! sellers - you have the best opportunity in years to attract motivated buyers! Price your home according to its CURRENT market value, not above it. And make sure your property shows extremely well, especially during the holidays and winter months.
To everyone who reads this:
May your holidays be filled with Family, Health, Love, Joy, and Football .
For those Men and Woman who are overseas and are not able to be with their families during this season.
Thank You for allowing me to do the things that I love so much. Come home soon and be safe.
Rob Zwemmer