Housing is key to an economic recovery, which is why the $787 billion package to be signed by President Obama on President’s Day includes a tax credit for first time home buyers that they do not have to repay and may in fact entitle them to a tax refund!  Every home bought by a first-time buyer stimulates two sales upstream in families moving to larger homes and empty-nesters moving to smaller homes.   

A summary of the new Home Buyer Credit from the Senate Finance Committee:  

“Last year, Congress provided taxpayers with a refundable tax credit that was equivalent to an interest-free loan equal to 10 percent of the purchase of a home (up to $7,500) by first-time home buyers. The provision applies to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit are currently required to repay any amount received under this provision back to the government over 15 years in equal installments, or, if earlier, when the home is sold. The credit phases out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return). The bill eliminates the repayment obligation for taxpayers that purchase homes after January 1, 2009, increases the maximum value of the credit to $8,000, and removes the prohibition on financing by mortgage revenue bonds, and extends the availability of the credit for homes purchased before December 1, 2009. The provision would retain the credit recapture if the house is sold within three years of purchase. This proposal is estimated to cost $6.638 billion over 10 years.”

In other words, the Economic Stimulus bill provides first-time home buyers with a refundable tax credit (one which, if it reduces your taxes below zero, entitles you to a refund) of up to $8,000 for purchases made before December 1 2009.  This credit phases out for single taxpayers with adjusted gross incomes that exceed $75,000 or $150,000 for married couples filing jointly.  The buyer will forfeit the credit if he or she sells the house within three years.

That’s $8,000 towards your Hunterdon Home:
                                                           

(Note: Dave Liniger is the founder of RE/MAX)Senator and House web sites to locate the email and phone number of your legislators.

If you have been watching the news this week, you may have noticed that the debate in Washington has finally turned toward real stimulus for the housing industry. As a result, I believe that we could be on the brink of a substantial turn around in the real estate market. Now, it’s critical that we all join together and deliver a powerful message to our legislators that we support this stimulus.

Last night, the Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. Read the rest of this entry »

There was an exceptional lack of home sales in Hunterdon County in the last quarter of 2008  (see January post) which might suggest a tremendous pentup demand:  Potential home buyers are waiting on a “buy” sign.  Will that signal come as the Fed drives mortgage interest rates down even farther?  Will it require more improved economic conditions, or more hopeful perceptions of economic conditions? 

The graph below shows the Inventory Index since January 2001.  Compared to anytime prior to 2005, the inventory of available homes is very high.  That’s not surprising, but the graph of sales activity (second below) over the same period may surprise you.

The graph above shows a dramatic rise in inventory.  The graph below shows a far-less dramatic drop in sales during this same period.  Although inventory has acumulated, home sales have continued over the past three years.

And while sales have been lower in the past three years, the Spring and Summer seasons have been much better than Winter lows of the earlier ‘hot’ years.  The level of continued sales reflects the fact that Hunterdon is a very attractive place to live and, as prices have fallen, the affordability of homes has increased their appeal. 

Pent-up demand gives us good reason to expect this year’s buying cycle to be even better than last year’s, once the economy, finance, and the weather start to thaw as we come into the Spring market.

News Flash: The National Association of Realtors reported a rise in homes placed under contract in December – Read the press release here. 

Let me put a “buy” sign on your home.  Please call me (908) 303-8130 for a free consultation or Contact me here.

I look forward to hearing from you and to marketing your home to get it Sold!
Don Sherblom, RE/MAX Town & Country (908) 303-8130
                     Personal Service, Professional Results!

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