The Success of Real Estate Atlanta Blog

How much house can you get these days for $80,000?

I started thinking about this a few weeks ago, when Congress extended and expanded the refundable tax credit for homebuyers.

With the credit, buyers can get back 10% of the purchase cost on a home -- up to $6,500 for many who currently own a home, and $8,000 for qualifying first-time buyers. In the season of gift-giving, it's a wonderful present from taxpayers to home shoppers.

Do the math: The best return goes to the first-time buyer who spends 80 grand and gets 10% back. But if you spend, say, $300,000, you still only get the $8,000 – a measly 2%.

So what can you get for $80,000?

In the vast areas in the middle of the country, where space is not really a major constraint on housing, it can go a long way. Obvious point: Many of the cheapest places to buy are cheap for good reason. The neighborhoods may be depressed or worse. Good jobs—any job--may be hard to find.

The National Association of Realtors tags Saginaw, Mich., as the metropolitan statistical area with the cheapest real estate in the country. Median price of a single family home: $61,000. So in Saginaw the full $80,000 will take you upscale. Zillow features this three bedroom, two bath house (1,266 square feet) for $34,900.

At the other end of the range stands the San Francisco Bay Area, where median prices are more than half a million bucks. What does the $8,000 tax credit get you? "It doesn't do much for us here," admits James Caldwell, manager of Prudential California Realty on Union Street in San Francisco.

When I pressed him, Mr. Caldwell said you could get a one-bedroom condo in some cheap but OK areas just outside the city, like Pacifica, for maybe $200,000 or so. An $8,000 credit will at least cover 4% of the costs.

Over the bridge in Oakland you can get something even cheaper.

Real estate Web site Trulia illustrates the range of options in: Cleveland, Dallas, Detroit, Ft. Lauderdale, Fla., Las Vegas, Oakland, Calif., Oklahoma City, Ok., and Tulsa, Ok. See the photos at left for some details.

One obvious standout: Las Vegas, essentially ground zero for the real estate collapse. For $80,000, notes Trulia, you can get a four bedroom, two and a half bathroom house with 1,600 square feet. It is, of course, pure coincidence that Senate Majority Leader Harry Reid (D.-Nev), who faces a tough re-election battle in the state next year, championed the extension of the tax credits.

The other big beneficiary of tax credit stimulus, of course, is over the border in Arizona, where home prices have taken a major haircut since the bubble popped.

Real estate Web site Zillow reports about 450 homes in Phoenix's Maricopa County, Ariz., for sale between $75,000 and $80,000. Spokeswoman Katie Curnutte says "three quarters have at least three bedrooms, and one quarter has at least four."

The comparable figure for Las Vegas was still impressive: 237 homes between $75,000 and $80,000.

But in San Bernardino, Calif., the figure was just 34 and in New York City you'd be laughed out of town.

Looking to make the most of your tax credit? Go west, young man.

Write to Brett Arends at brett.arends@wsj.com

Image via Wikipedia

Sales of previously owned homes rose across the country during the third quarter, according to a report released Tuesday by the National Association of Realtors.

Nationally, sales were up 5.9 percent from the third quarter of last year. Previously owned homes changed hands at a seasonally adjusted annual rate of 5.3 million, according to the report. NAR attributed much of the jump to continued affordable prices and a federal income tax credit. Congress and President Obama legislated an extension and expansion of the tax credit program last week.

Home sales rose in 32 states and Washington, D.C., from the third quarter of 2008 to the third quarter this year. Sales jumped in 45 states, and in Washington, D.C., from the second to the third quarter.

There was no lack of media enthusiasm for the news on Tuesday as local media outlets across the country finally picked up on the good news...

1. Home sales up nearly 79.6% in October in Orlando

2. Pittsburgh home prices rise in third quarter

3. US Home Sales Rise to Two-Year High

4. Home prices seen stabilizing in North Jersey

5. NJ homes sales jump 11 percent in quarter

6. DC Area housing sales jump

7. Las Vegas Home Sales On The Rise

8. Florida home sales up for fifth straight quarter

9. Houston-area home prices rise in third quarter

10. Ohio home sales rose during the third quarter

11. Nashville home sales climb first time in three years

12. Lehigh Valley home sales rise 30 percent in October

13. Illinois Third Quarter Home Sales a Bright Spot in 2009

14. Home Prices Are Suddenly Hot in Some Areas...

Back in June we pointed out a dozen housing markets that were showing pricing improvement. August revealed a dozen more.

While some year over year comparisons continue to show price erosion recent jumps in the national S&P/Case-Shiller Home Price Index further clarifies that the price drops of the past few years are now over. The 20-city index is now consistently rising quarter-over-quarter.

Three independent sources, the National Association of Realtors, the Federal Housing Finance Agency and Case Shiller are now all showing housing price improvement.

Repeatedly we've said that the strength of this recovery will be measured in part by how well the housing industry fares. Tuesday was further strong evidence that this recovery continues unabated

Source:Seeking Alpha