IRS Clarifies What's Needed to Claim Tax Credit

The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.

While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties' signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn't common.

The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. ... The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return."

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

Contrary to what some may think, homes are still selling in the Boise metro area!  In the 4th quarter of 2009, 1742 homes sold in Ada county and 837 homes sold in Canyon county.  If you are wanting to sell your home, now may be the time to do it.

Even though selling a home can be challenging during our current real estate market, the truth is that many homes are selling now. The ones that are selling have 1 thing in common - they are priced right for this market.  Home sellers' expectations for the price that their home is going to sell for can be quite different from the reality of what this current "buyers market" dictates. 

The key element right now is actually to price the home at a level below what the comparable sales indicate.  This is especially true if the comparable sales are several months old in a declining market.  Not only has the overall market declined in price over the past several months, but it is continuing to decline even now.  If the average time to sell a home right now is 120 days, then we have to look at where we feel the market is going to be in 120 days and price the home accordingly.  This strategy will get the home sold and, believe it or not, help the seller to get top market price for their home.

One thing to remember is that if you are selling and buying another home in the Boise metro area, you may be taking a perceived hit on your home sale price, but the home you purchase will be taking an equal or larger hit.   I like to ask my clients, "Where do you want to wait for the market to come back - in your current home or in your new home?" 

It is an extremely good time to sell if you are a move-up buyer. 

Please contact me if you would like to get an honest opinion on your home's current market value or you can log on to www.WhatsMyBoiseHomeWorth.com for a look at your home's market value sent to you by e-mail.

According to the Wall Street Journal today, nearly one in four U.S. borrowers owe more on their mortgage than their home is worth, a worrisome sign that the housing recovery could be threatened by a wave of defaults.

"The WSJ newspaper said almost 10.7 million households, or 23 percent of mortgage holders, were underwater in the third quarter, and 5.3 million have mortgages that are 20 percent higher than the value of their home as prices have plummeted since the recession began."

Today the U.S. House of Representatives overwhelmingly supported a measure to extend and expand the First Time Homebuyer $8000 Tax Credit until April 30, 2010.  The measure was also passed unanimously by the Senate last night, and is currently on the way to the President for his signature.  The President is expected to sign the measure as early as Friday.  The measure also includes a new $6500 tax credit for existing homeowners who qualify for the program.  Details of the legislation that was passed, including information on who qualifies for the credit, can be found here: http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf 
 

According to a recent Ada County Association of Realtors, the big question coming into September: "Will August continue the momentum of the previous two months?"   The answer is "Yes".

August sales are up 2% from July and up 8% from August 2008. This is the third month in a row for an increase over last year's same month. This 3-month trend reverses the 35 months of year-over-year decreases we have suffered. According to ACAR, we're likely to look back at the Summer of '09 as the beginning of the comeback.

Pending sales also continue to increase.  July 2009 there were 51% more Pendings than July last year - now there are 63% more pendings. Even New Construction Pendings are 23% above 2008.

Short Sales and bank-owned properties are up slightly. Short sales were 15% and bank-owned sales were 20% in August. That makes 35% of the sales in August were "distressed" sales.  Our high was 48% in February, 45% in March and 44% in April.

Median home price continues to hover in the $170K to $175K range. In August, the median price was $171,000. This is down 2% from July and down 17% from July 2008. There was a jump in new home median in August compared to July this year - up 7%. Looking back at July, we observed a big drop in new construction home median, but August seems to correct that.

Inventory is now back to 2006 levels. We now have 7.5 months of available inventory (3289 resale and 755 new homes).

Finally, the final sales price seems to be getting closer to the final asking price. The discount between listing price and final sales price decreased to 2.9%.

Affordability is at its best ever!  Buying a home in Boise, Idaho, and surrounding communities has not been a better buy for a very long time.  For those of you trying to time the market, NOW is the time!  Jump in and buy!

Tim Burroughs, Realtor    208-409-7653

According to credit union executives and NCUA data, the most current edition of Credit Union Times states that, in general, credit unions appear to foreclose on a smaller percentage of their mortgage loans than other financial institutions and usually take longer to go through the process.

In the Credit Union Times report, RealtyTrac, a company that promotes itself as the "leading online marketplace of foreclosure properties," reported that foreclosures nationwide rose 7% in July over the previous month and were 32% higher than what they had been a year before.  The worst states for home foreclosures were Arizona, California, Florida and Nevada, which has been consistent for many months.  However, Colorado, Idaho, Georgia, Illinois, Oregon and Utah were also in the upper rankings for RealtyTrac.

"No doubt our foreclosures have been lower than the nation overall," said Jack Gaffney, executive vice-president for lending for the Navy Federal Credit Union, "but generally higher than we are used to."  Partly the reason credit unions have a smaller percentage of foreclosures is that they did not make the same sorts of risky, novelty loans that got so many homeowners and other lenders in trouble.

"Lenders are slower to foreclose when housing prices are in the dumps," Gaffney went on to say, "and they calculate they will have to hold the properties for longer.  If a market starts to rise, they might foreclose faster in order to move the foreclosed property back into a more profitable situation more quickly."

Why is it that we only seem to hear about the bad news from the media?  I would like to give you some Good News!

FACT:  Approximately 30% of all U.S. homes are owned free and clear and do not have a mortgage.

FACT:  Of the 70% of households that do have a mortgage, 96.7% are NOT in foreclosure, according to the Mortgage Bankers Association.

FACT:  The U.S. Gross Domestic Product is more than the GDP of the next 3 countries combined (Japan, China, Germany).

FACT:  When mortgage rates fall to a record low, housing affordability surges to a record high.

FACT:  The Housing Affordability Index is at the highest level of affordability in history.

First-time buyers have more flexibility when entering into the real estate market because they aren't concerned about selling an existing home first - and given the low home prices, plentiful supply and very attractive interest rates, this is the optimal time for entry-level buyers with a long-term view.

Plus, first-time buyers can get a tax credit for as much as 10% of a primary residence purchase (up to $8,000) as part of the recently passed Economic Stimulus Bill of 2009.  The local Idaho Housing Authority offers a short-term loan of $7,000 for downpayment, which is due to be repaid after a first-time buyer gets his or her refund of the tax credit back from Uncle Sam.

As a move-up buyer, if you own a home that doesn't fulfill your current needs or you have a desire to change neighborhoods, take advantage of all options in available inventory.  It's a perfect time to find a home you really love.

As for investors, HOUSES ARE ON SALE!  Prices have adjusted approximately 12% across the country, even more than that locally (about 24%).  If you are looking for a long-term investment in real estate, then you should be enthusiastically looking for properties right now.  With the built-in discount on prices and interest rates, smart investors can hold onto the property to build equity and long-term wealth.

If you fall into any of these potential home buying categories, you might want to think of jumping into the local Boise real estate market soon.  My team and I, at the Tim Burroughs Group of Keller Williams Realty Boise, would love to help you fulfill your dreams of home ownership, moving up, or investing. 

With 14 years of experience, I am ranked in the top 1% of all real estate agents in Ada and Canyon counties.  As a previous real estate appraiser and mortgage lender, I bring a wealth of knowledge to my career as a Realtor.  You can reach me at 208-409-7653 or Tim@TimBurroughsGroup.com.  Give me a call or drop me an email.  Let's discuss how I can best serve you.

TOP 10 THINGS TO KNOW ABOUT BEFORE MOVING TO BOISE, IDAHO:

1.  Boise is known for its great lifestyle - terrific schools, lots of sports and activities for the kids, close to the great outdoors, and a low crime rate.

2.  Boise has consistently been ranked in the top 10 best places to live and the top 5 best places to do business.

3.  Boise's weather is relatively mild, but we do get to enjoy 4 distinct seasons.

4.  Boiseans take education very seriously with many nearby schools of higher education - Boise State University, Northwest Nazarene University, College of Idaho, University of Idaho satellite campus, Idaho State University satellite campus, College of Western Idaho (community college), University of Phoenix remote campus, and George Fox University remote campus.

5.  Boiseans also take their sports very seriously.  From college teams, like ESPN favorite and national WAC champs BSU Broncos, to professional farm teams such as the Boise Hawks baseball, Idaho Steelheads ice hockey team, and the Idaho Stampede basketball team, as well as semi-pro indoor football team, The Boise Burn.

6.  World-famous hunting, fishing and kayaking is within 1 hour of downtown Boise.

7.  Boise offers major concert venues, opera, live theater and a jazz festival (as well as rodeos).

8.  Golf and water ski on the same day in the summer and early fall, and golf and snow ski on the same day in the spring.

9.  With a population approaching 500,000 in the greater Boise metropolitan area, Boise ranks as the 3rd largest city in the Northwest.

10.  Boise real estate prices are affordable, and the neighborhoods are well-kept and charming.  Many of the newer neighborhoods, in a variety of price ranges, have parks and walking paths.  Some even have their own community swimming pools and clubhouses.  

If you would like to read more about our wonderful and exciting area, just go to the Home page at www.TimBurroughsGroup.com for more information.  If you would like a relocation information package sent to you, just drop us an email to:  Info@TimBurroughsGroup.com .