Archive for August, 2008

First Time Homebuyer Tax Credit/Refund; Are You Eligible?

We may start to see families and employers lending money to first time buyers for down payment Money; to be paid back after the buyers do their taxes… 

You see; as part of the the recent Housing and Economic Recovery Act of 2008, all first time home buyers who purchase a home after July 9,2008 and before July 1, 2009 are eligible for up to 7,500 in tax rebate money-

Anyone who has not bought a home for the last three years is eligible!

This is not so much a tax credit as it is an actual rebate; except it has to be paid back; so it’s like an interest free loan.

Here’s the rules:The credit will be equal to 10% of the purchase price of your home but can not be more than $7,500.  You will be able to subtract the amount of the credit from your  tax liability, increasing your refund or reducing the taxes you owe. For example, if you were to file your ‘normal’ tax return to find that you owe $2,000 in taxes;  with the credit, your tax are  lowered by $7,500—which means, you  would get a $5,500 REFUND!

So, what’s with the loan part of the deal? The tax credit is really a loan; two years after the credit is claimed, you start repaying at a rate so that you will have paid the credit back in full over the course of 15 years.  So for those who get the full credit, the pay back amount is $500 per year. For those getting less than the full credit, you pay equally over the 15 years. But it’s interest free!

 

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Interesting Sacramento Market Statistics for First Two Weeks of August

New listings are finally outpacing pending sales. In the tri-county area (Sacramento, Placer, El Dorado) it looks like the summer flurry is already subsiding- the total available homes on the market is now building again.

A good thing for many eager buyers who had been out-bid on homes that had seen multiple offers… Many first time buyers who are relying on down payment assistance and or other first time programs have had a hard time competing with stronger offers… We have been working with several buyers who have written scores of offers (one couple has written over 15 offers) and been outbid each time- they are finally in contract!
 
 
Check out the numbers
 
 
Active: 2207 Pending: 1846 Sold: 893 Other: 0 Total: 4946
Bedrooms Bathrooms Square Feet List Price Selling Price Days on Market
Minimum 0  0.00  90  $22,900  $28,500  0
 Average 3  0.00  1,806  $283,188  $276,468  37
 Median 3  2.00  1,575  $232,900  $247,000   12
 Maximum 7  0.00  10,500  $3,600,000  $3,500,000  518
 Total Dollar Value  $246,886,155
 
Average DOM Breakdown and Average % of List Price received on Solds by Market time:
0-30 Days  31-60 Days  61-90 Days  91-120 Days  120+ Days
 No. of Listings  488   124   76   86   119
 Breakdown %  54.65   13.89   8.51   9.63   13.33
 Avg SP % LP 100.96   97.19   96.18   94.45   94.25
 
 
It’s amazing how different our local markets are from one another, though, for instance, in Folsom, there are only 23 bank owned homes on the market in the whole zip code… As of 2007, the State of California’s estimate of Folsom’s population is 70,835. the market is amazingly stable and predictable.
 
In Elk Grove, there are 245 bank owned homes!! In a town that the State’s estimates place the  population at 136,318. Not so stable… it’s two totally different markets, just a few miles from one another…

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What Will the First Anniversary of the Credit Crunch Mean to Sacramento?

In some ways, I can’t believe it’s already been a year… But in other ways it seems like this market is just the ‘new normal’, and its been like this forever…

Ben bernenke said just over a year ago that  “Troubles in the subprime sector seem unlikely to seriously spill over to the broader economy or the financial system”.

Wonder what he has to say about that now; with the Dow Jones down almost 15%, economic growth down more than 50% and eight major U.S. banks along with thousands of employees now gone.

Michael Burry,head of Silicon Valleys Scion Capital’s says “I doubt we’re even a third of the way through it,”see full story.

Add the financial woes of the California State Budget  , four dollar a gallon gas… the future seems a little scary…

I’ve done some numbers crunching and it seems that the Sacramento area housing inventory of homes for sale over the $350,000 mark is now growing.  Demand for the lower prices up to around $350,000 is still running neck and neck with supply.

 

 

 

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