Existing-Home Sales Record Big Gains
Driven by the home buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories have continued to decline.

Existing-home sales—including single-family, townhomes, condominiums and co-ops—surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

Tax Credit Fuels Surge

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”

Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through—there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.

Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.

Inventory Declines

NAR President Vicki Cox Golder said strong demand by first-time buyers is creating some unusual conditions. “In parts of the country, especially in Southwestern states but also in Florida and suburban Washington D.C., we’ve been getting many reports of multiple bids in the lower price ranges with foreclosed properties getting absorbed quickly,” she said.

“In fact, low-end inventory has become very tight in many areas and in some cases buyers are becoming more aggressive. In this kind of environment it’s important to work with a REALTOR® who can walk you through the process and help you negotiate a satisfactory deal,” Golder said.

Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.

“The supply of homes on the market is now at the lowest level in over two-and-a half years – we’re getting closer to a general balance between buyers and sellers,” Yun said. The last time the relative housing inventory was this low was in February 2007 when it also was at a 7.0-month supply.

The highly successful first-time homebuyer tax that was set to expire at the end of this month has been extended for a second time.  Plus, it is now available to people that currently own homes.  There are a lot of myths about who can get this tax credit, so I have prepared the following for you:

Important date:  May 1, 2010.  This is the date that purchase contracts must be signed to be eligible.  The transaction must close by July 1, 2010.  But purchase contracts dated June 1^st, for example, are not eligible even though they will close prior to July 1^st because the contract was executed after the May1, 2010 deadline.

First-time Homebuyer: Tax Credit Amount = up to $8,000.  How is this calculated? It is 10% of the home’s value or $8,000 whichever is less.  So, any home over $80,000 will get a maximum tax credit of $8,000.  What is a First-time homebuyer?  It is anyone that has not previously owned a home or has not owned a primary residence within the last 36 months.  Individuals that currently own second homes or vacation homes but have not lived in them for the past 36 months may still qualify.

Existing Homebuyer: Tax Credit Amount = up to $6,500.  This is for current homeowners that have lived in their current home for at least 5 years.  So, if you purchased your home 2 years ago you would not qualify. Military Bonus:  If you served in our military for more than 90 days outside of our boarders, you get a one-year extension and have until 2011.Income Limits:  The tax credit begins to phase out for a single person that makes more than $125,000.  For married couples it phases out at $225,000.

The percentage of homes financed with a loan backed by the Federal Housing Administration has grown from 3% to 25% in a very short period of time.  As a result, the cash reserves that FHA is required to keep on hand (as a percentage of outstanding loans) has fallen below acceptable levels. In order to address this and other concerns about FHA, they have announced that they will be making some sweeping changes.  Some of these changes include raising the minimum net worth of FHA lenders, and raising minimum credit score standards.  This could have a dramatic impact on the availability of FHA loans to home buyers.  Currently, the average minimum credit score that FHA lenders will accept is 620.  Raising this score will keep many borrowers out of FHA loans.  Call me or your trusted mortgage lender for more information.

Sales of newly built single-family homes rose 11 percent in June to an annualized rate of 384,000, according to a report released Monday by the U.S. Department of Housing and Urban Development.

Analysts called the report a good sign.

“That is really good news,” said Peter Morici, an economics professor at the University of Maryland. “With all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out.”

Pat Newport, a housing industry analyst for IHS Global Insight, also applauded the report. “The tax credit is boosting demand, but what will happen when it goes away in December?” he asked.

Excess inventory still exists in some key markets:

• California
• Florida
• Las Vegas
• Arizona

But overall, business is better. “The time for getting deals is going away.” Markstein said.

Source: CNNMoney.com, Les Christie (07/27/2009)

First Time Home Buyers - $8,000 Tax Refund

Are you a first time home buyer? Have you not owned a home in 3+ years?

Then you may be eligible to receive a $8,000 tax refund if you purchase a home before 12/1/09. You can visit www.irs.gov or speak with your tax advisor for more information.

With rates as low as 5.0%, don’t miss out on this amazing opportunity!!

$1,800 Tax Credit for Georgia Residents

On May 11, 2009 Governor Sonny Perdue signed House Bill 261 into law allowing Georgia Residents to receive a $1,800 Tax Credit on homes purchased between June 1, 2009 and Nov 30, 2009. This tax credit is not limited to 1st Time Homebuyers; it is for All Georgia Residents purchasing a single family home or condo used as primary residence after June 1, 2009 and no later than Nov 30, 2009. Only certain homes qualify for the $1,800 Tax Credit - the home must be on sale prior to May 11, 2009 and still for sale or must be in default on or before Mar 1, 2009, or already foreclosed and held by a bank or mortgage company. The Georgia Tax Credit is $1,800 or 1.2 percent of the purchase price whichever is less. The Georgia Tax Credit can be claimed on end of year Georgia State tax return over 3 year period including 2009, 2010, and 2011. Total tax credit allowed in a single tax year shall not exceed the taxpayer’s income tax liability or one-third of the total amount of the credit allowed. The $1,800 Georgia Tax Credit can be used in addition to the 1st Time Homebuyer Tax Credit as the two tax credits are completely separate and neither affects the other. This means that 1st Time Homebuyers who are a Georgia Resident can receive up to a total of $9,800 total in Federal and State tax credits if they purchase a home that qualifies for the Georgia State Tax credit within the next 6 months.

Please call Kristy Agan at 706-346-4289 if you have any questions about either of these great opportunities.

Keller Williams Realty Brokerages Dominate Annual Industry Surveys
3^rd largest company in U.S. the only major franchise to show growth

AUSTIN, TEXAS (May 19, 2009) —According to two of the industry’s most comprehensive annual surveys, Keller Williams Realty brokerages continue to defy the pervasive downturn in the industry by growing and expanding.

RISMedia’s Power Broker Report and REAL Trends’  REAL Trends 500 rank the largest residential real estate brokerages in the U.S. based on transaction sides and sales volume. This year, Keller Williams Realty had more brokerages on both lists than any other real estate brand.

In the REAL Trends 500 report, Keller Williams Realty dominated, with its offices comprising more than a quarter of the entire list. Of all the major brands represented in the report, Keller Williams was the only company to boast growth in both number of agents added to its ranks and in total transactions closed.

Within RISMedia’s Power Broker Report, Keller Williams Realty again had the largest majority on the list – accounting for 35 percent of all the brokerages listed. The report also ranked Keller Williams Realty #1 in number of agents and total closed transactions.

“These results prove what we already knew – Keller Williams Realty is experiencing the next phase of our growth during this shift,” said Mark Willis, CEO of Keller Williams Realty, Inc. “Our agents and offices are capitalizing on the opportunities presented in today’s market and powering forward.”

“Two years ago, when the market began to shift, we mobilized to make sure our people would have the training, support and technology to tackle the market and they have truly blown us away with their accomplishments,” he added.

Within the past 18 months, Gary Keller, co-founder and chairman of the company, released his latest book, SHIFT: How Top Real Estate Agents Tackle Tough Times which became the No. 1 selling real estate book for agents in 2008. The launch also included a nationwide seminar tour which is slated to visit more than 50 cities throughout North America by the end of the summer. Other initiatives included the delivery of affordable health care options for KW associates through the new Keller Williams Health Providers Program and the launch of the company’s commercial arm, KW Commercial.

“When we do what we do best – coach and train our associates to higher levels of personal productivity and profitability – growth takes care of itself,” said Mary Tennant, president and COO of Keller Williams Realty, Inc. “Keller Williams Realty, the franchise company, didn’t rank on these lists – our people did.”

“We’re confident we’re in businesses with some of the most talented and focused individuals in the industry and we are so proud of all they’ve achieved,” added Willis.

On May 11, 2009 Governor Sonny Perdue signed House Bill 261 into law allowing Georgia Residents to receive a $1,800 Tax Credit on homes purchased between June 1, 2009 and Nov 30, 2009. This tax credit is not limited to 1st Time Homebuyers; it is for All Georgia Residents purchasing a single family home or condo used as primary residence after June 1, 2009 and no later than Nov 30, 2009. Only certain homes qualify for the $1,800 Tax Credit - the home must be on sale prior to May 11, 2009 and still for sale or must be in default on or before Mar 1, 2009, or already foreclosed and held by a bank or mortgage company. The Georgia Tax Credit is $1,800 or 1.2 percent of the purchase price whichever is less. The Georgia Tax Credit can be claimed on end of year Georgia State tax return over 3 year period including 2009, 2010, and 2011. Total tax credit allowed in a single tax year shall not exceed the taxpayer’s income tax liability or one-third of the total amount of the credit allowed. The $1,800 Georgia Tax Credit can be used in addition to the 1st Time Homebuyer Tax Credit as the two tax credits are completely separate and neither affects the other. This means that 1st Time Homebuyers who are a Georgia Resident can receive up to a total of $9,800 total in Federal and State tax credits if they purchase a home that qualifies for the Georgia State Tax credit within the next 6 months.

Please call Kristy Agan at 706-346-4289 if you have any questions.