Western Mass Home Sales Almost Doubled Says Latest Numbers

The anticipated sunset on the $8000 first time homebuyer’s tax credit spurred a flurry of activity in the market and resulted in a near double of the number of homes sold in three Western Massachusetts counties in November.

The RAPV announced yesterday that home sales in Hampden, Hampshire and Franklin counties were up 97.9 percent for the month this year over the numbers in November of 2008. Last year 236 units closed. This year’s tally was 467.

Further good news indicated that sales prices increased as well, with the median price rising by $500 per unit, an increase of .3 percent over the same period in 2008.  This is significant because it is the first time this year that an increase in the number of units sold did not correlate with a decrease in the median price.

Clearly the fear of missing out on the tax credit had a lot to do with this bump, but this is another serious indicator of the market making a slow and steady recovery.

In November, Congress extended the original tax credit and expanded the program to include a $6,500 credit for homeowners who are buying a different home. First-time buyers are still eligible for $8,000. But in order to qualify for either, buyers need to be under contract by the end of April and have the deal closed within 60 days.

Broken Down By County

In Hampden County, sales were up 105.1 percent from 159 in November 2008 to 322 last month. The median price was up 3.2 percent from $165,000 to $170,000.

In Hampshire County, sales were up 95.3 percent from 43 in November 2008 to 84 last month. The median price was down 4 percent from $240,000 to $230,500.

In Franklin County, sales were up 79.4 percent from 34 in November 2008 to 61 last month. The median sales price was up 14.6 percent from $157,000 in November 2008 to $180,000 last month.

Good news for sellers was also revealed in the report. News broke that the inventory for homes that continue to languish on the market is dwindling.  Its down 13.5 percent from 3,012 at the close of November last year to 2,606 at the end of last month.

Houses are moving, prices are remaining reasonable and the government is helping hand homeowners the keys. Now is the time to get in to the buyer’s market or to list that house to get it sold.  Give me a call if you have any questions or you are ready to begin the process. Let me be your Real Estate Advocate!

jason@burkins.net
413.537.2838

Information used in this post comes from the RAPV and Masslive’s Article by Jim Kenney, 12.15.09

The Newly Extended and Expanded Home Buyer Tax Credit

Late last week, President Barrack Obama signed a law that extends the $8,000 first time home buyer tax credit to the end of April 30, 2010.  It also introduced a brand new $6,500 credit to homebuyers who have lived in their current home for at least five years and are seeking to relocate.  Below are more specifics on the credits:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

(Details of the plan provided by the National Association of Home Builders)

 

Realtors® Call on Congress to Extend and Expand Home Buyers’ Tax Credit

I wanted to point out a push by the national, state and local Realtors® associations to influence Congress on the fate of the First Time Home Buyer Tax Credit. I, along with many of the other Realtors® across the nation, have called upon our members of Congress to consider extending the First Time Home Buyers program beyond November 30, 2009 and to consider expanding the program to include all types of future home buyers during the extended period.

What follows is the letter sent to Congressman Richard E. Neal. I urge you all to send your Congressmen similar letters of support of these efforts on behalf of home buyers.

Dear Congressman Neal;

As a Realtor® and a constituent, I can assure you that the $8,000 first-time homebuyer tax credit has definitely been a success. Homebuyer interest and housing sales increased almost as soon as the ink was dry on the tax credit legislation. Today’s lower prices and interest rates appeal to consumers, but it’s been the tax credit that has attracted people to open houses and to homeownership.

That progress could grind to a halt sooner than you think. Congress must act NOW to extend the credit through 2010. Otherwise, uncertainty will return and the market might again be frozen — possibly as soon as October.

A homebuyer is eligible for the tax credit only if the home is “purchased” before December 1, 2009. That means that buyers have to find a house, complete a contract, satisfy any contingencies, secure financing and go to closing by November 30.

Accomplishing those tasks by November 30 will become more difficult with every passing day. In today’s market, it generally takes between 45 and 60 days to go from contract to closing.

The market has improved, but it has not yet fully corrected itself. The credit needs to be extended for an additional period of time and expanded in order to build upon the progress that’s been made. Uncertainty about the future of the credit will dampen consumer demand. The best way to assure continued housing activity is to extend and expand the credit and to do that NOW.

We can’t wait until late in the year to see what happens. Consumers will drop out soon if they can’t predict what’s in their future. Please act NOW to extend and expand the credit through 2010.

Sincerely;

Jason A. Burkins
Realtor ®
Wilbraham, MA