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

Economist says expansion will help more people buy, sell homes
By NANCY SARNOFF
HOUSTON CHRONICLE

The newly expanded federal tax credit for home buyers could be a shot in the arm for the Houston-area housing market.

The $8,000 incentive, which was set to expire Nov. 30, will now run through the end of April.

The new legislation also raises the income limits of those who qualify and allows current or recent homeowners to benefit, too.

“The net effect of the extension and expansion of the tax credit will help boost sales,” said Jim Gaines, an economist with the Texas A&M Real Estate Center.

How much, though, is hard to say.

The National Association of Realtors estimates 350,000 homes nationwide were sold to first-time buyers who probably wouldn't have bought without the credit. That's about 10 percent of the sales expected this year, Gaines said.

He estimates the market could be boosted by at least another 10 percent.

“The only reason I think it could be that much is because of the move-up or move-over buyer,” he said.

The expanded legislation, signed by the President Barack Obama last week, allows people who have owned a house for at least five consecutive years over the past eight to qualify for a credit of up to $6,500.

Vicki Fullerton, chair of the Houston Association of Realtors, sees another benefit to the new credit.

Not only will it allow current homeowners to buy something new, it also could help those relocating to Houston sell their homes in slower markets.

The credit applies to homes priced up to $800,000.

“In some of those other high-cost areas, getting the tax credit will help,” Fullerton said.
‘I can close whenever'

Joseph Bell isn't a move-up buyer, but he still has a good reason to be happy the credit was extended.

For the past two weeks, he's been scrambling to close on his new house before the deadline.

He didn't think it would take more than a month, but dealing with the bank, insurance company and real estate agent has been a lengthy process.

“Now it's not a big issue,” said Bell, 27. “I can close whenever, and honestly, the longer we delay everything, the more money I'll have for the down payment.”

Even with the broader requirements, the impact could be minimal.

The first iteration of the tax credit may already have brought everyone into the market who wanted to be there. “We may have grabbed a bunch of them that might have been buyers in 2010,” Gaines said.
‘Back on the fence'

Economic concerns are also creating uncertainty. Houston's jobless rate inched up to 8.5 percent in September.

“It's putting (buyers) back on the fence,” Fullerton said.

Still, the combination of low interest rates, affordable housing prices and the tax credit could make a “once-in-a-lifetime period” to buy, Gaines said.

Unless the tax credit brings in far more buyers than anticipated, prices aren't likely to see much change.

“Houston has always been a competitive market. Pricing will fluctuate like it always does, but I don't see it spiking or going down either,” said Steve VonHofe, division president of Taylor Morrison, which builds homes for a variety of prices around the Houston area.

VonHofe said more than 50 percent of sales have been stimulus-related.

“I can't say all those buyers wouldn't have bought, but they definitely took advantage of it,” he said.

nancy.sarnoff@chron.com

By Luke Mullins



While many Americans can't wait to cook their turkeys and decorate their Christmas trees, anyone trying to sell a home in the coming months will have an entirely different perspective of the holidays. More than three years after home prices peaked, sellers are still facing an unaccommodating market. On average, it takes between seven and eight weeks to sell a home these days. That's up sharply from four to five weeks back in September of 2005, according to the National Association of Realtors. But the real estate market's seasonal pattern will insert an additional hurdle in front of home sellers this winter. Since many home buyers with children plan their purchases around the scholastic calendar—starting their search in the spring, signing a contract in the summer, and moving in by late August—sales activity tends to erode as the days grow colder before bottoming out in January or February. That means anyone selling a home over the holiday season will have more than just long lines at the mall to contend with. Here are 10 tips to help sellers get the best deal they can during the sluggish, off-season housing market:


1. If you can, wait: With the dynamics of the national housing market heavily favoring buyers, those in a position to postpone their home sale—even for a few months, until the spring—should consider doing so, says Guy Cecala, the publisher of Inside Mortgage Finance. "If you are really looking for top dollar and what people got a couple years ago, don't even bother putting it on the market," Cecala says. "And there are a lot of people who are making that decision."

2. Know your local market: Nothing will affect the outcome of your home sale more directly than its price tag. But in order to determine an appropriate price, you've got to know the ins and outs of your local real estate market. Truth is, all those stories about the national housing slump aren't nearly as important as the developments going on right in your neighborhood. So sellers should do everything they can to take their local market's pulse: read the real estate section in the local newspaper, click through a good housing blog that covers the area, check out nearby homes that are for sale: How much are they selling for? How long are they staying on the market? Here is where a real estate agent with experience in that local market can be a big help. "You can't just look across an entire marketplace and say, "Here is my metro area, and here is what's happening,' " says Keith Gumbinger of HSH.com, a publisher of mortgage and consumer loan information. "You have to try to attenuate yourself with what is happening in your very individualized local market." In addition, take note of any nearby foreclosed properties, as well as changes to the local economy that could alter future housing demand.

[See 10 Secrets of Off-Season Home Buying.]

3. Price aggressively: Once you've got a handle on local market conditions, it's time to price the property. In so doing, be aware that today's buyers are demanding bargains. "The market is very impatient and unforgiving on high-priced houses," says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. "If you are priced over the market, it is unlikely that anything will happen." That means you might have to list the property at 10 to 20 percent—depending on your local market, of course—below what you think it is worth, Cecala says. "Properly priced houses—i.e., discounted houses—are getting snapped up, and people will even bid on them," Cecala says. "If you are trying to capture what you saw [in home prices] two or three years ago, you may not be able to see that for five or 10 years. And people don't seem to accept that."

4. Negotiate your broker's commission: Since you may have to list your home for lower than you would like, it's worth asking if your broker is willing to accept a reduced cut as well. Broker's commissions averaged 5.20 percent in 2008, according to a March 2009 ForSaleByOwner.com analysis. And by handing a smaller cut to their agent, sellers can help soften the blow of the sluggish market. "You want to negotiate your commissions beforehand, especially if you are already pricing very aggressively," Gumbinger says.

5. Get preinspected: With the economy staggering under the weight of 10.2 percent unemployment, home buyers aren't walking around with a lot of cash for home repairs. That means homeowners need make all major repairs before putting the property on the market. To determine what repairs are needed, sellers should have a home inspector evaluate the house, says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. "In today's market . . . you can lose a sale over the silliest things after a home inspection," Moore says. "And it's not necessary if you get it taken care of beforehand."

Image via Wikipedia

By: Marketwire

SAN DIEGO, CA -- (Marketwire) -- 11/13/09 -- Aided by the home buyer tax credit, the outlook for housing and the economy appears headed for a sustainable recovery, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. "Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices," he said. "In fact, the credit is working better than first projected -- it now looks like we'll have 2.3 to 2.4 million first-time buyers this year."

A large consumer study being released later today, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers shows first-time buyers accounted for a record 47 percent share of home sales over the past year, up from 41 percent in the 2008 survey. The share has risen steadily since a cyclical low of 36 percent in 2006.

Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0 percent over last year, and then are forecast to rise 13.6 percent to 5.69 million in 2010. "A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy," Yun said.

New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.

The 30-year fixed-rate mortgage will probably average 5.3 percent in the fourth quarter, rising gradually to 5.8 percent by the end of next year. NAR's housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for home buyers.

"We've seen a steady downtrend in housing inventory for well over a year and home prices appears to be in the early stages of stabilizing. With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences," Yun said.

He expects growth in the U.S. gross domestic product to be at a pace of 2.5 percent in the current quarter, with GDP up 2.8 percent in 2010.

The unemployment rate is close to peaking and is projected to ease to 9.5 percent by the end of next year.

"The size of the U.S. budget deficit is a concern going forward, and carries the risk of higher inflation. At this point, that risk appears to be restrained," Yun said. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4 percent this year, then rising 1.6 percent in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4 percent this year and 1.2 percent next year.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Existing-home sales for October will be released November 23; the next Pending Home Sales Index and forecast will be on December 1.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.


Walter Molony

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