Obama Signs Homebuyer Tax Credit Extension

November 9, 2009

Housing Tax Credit Extension is Passed

It’s official! On Friday, November 6th, 2009 - President Barack Obama has signed a $24 billion economic stimulus bill that gives tax incentives to prospective homebuyers. In a rare bipartisan agreement, the US House of Representatives have voted 403-12 to extend and even expand the homebuyer tax credit.

The extension will now last until April 30th, 2010 and amount of credit is $8000 (or $4000 if married but filing separately). In addition to the extension, the bill will also include a tax credit for current home owners as of December 1st, 2009 to April 30th, 2010. The credit amount is $6,500 (or $3,250 if married, but filing separately).

Similar terms and conditions will still apply. For example: the homeowner must have used the home as a principal residence consecutively for 5 of the previous 8 years and the home purchase agreement must be signed no later than April 30, 2010, however the purchaser will have until July 1, 2010 to close. Income restrictions were also raised and are now listed at $125,000 if single, or $225,000 if married. The bill also includes a limitation on the purchase price of the home - up to $800,000.00

The White House released a statement which says the new law also includes tax credits for struggling businesses and unemployment extensions and will build upon the stimulus package from last February for $787 billion. It is their hope that this tax credit will help struggling families (many of whom have suffered job loss within the past year) avoid foreclosures on their homes.

The 5 Best Housing Markets in the US

October 2, 2009

I know it sounds crazy, but YES! Despite the downward spiral of home values over the past year, there are actually major cities where current market values have been on the rise! Gathering data from Zillow’s second-quarter home value index and comparing it to the same time in 2008, it was discovered that a handful of cities seemed to be immune to the market crash!

Top Five Best Housing Markets for 2008-2009

And the winner is….

1) Boulder, Colorado

Share of Homes with Increased Value: 59.39% Median Home Value: $347,200

This great city is home to successful employers and the University of Colorado. In addition to steady jobs, this area is limited in the number of homes because of the Rocky Mountains which outline the skirts of the city and the vast amount of protected natural areas.

2) Spartanburg, SC

Share of Homes with Increased Value: 56.81%  Median Home Value: $106,900
A mere 75 miles west of Charlotte, this bounding city is the first and only city in South Carolina to be named as a Bicycle-Friendly community by the League of American Bicyclists. It is home to three major colleges and universities as well as a few major corporation headquarters including Denny’s and Extended Stay Hotels. Still it maintains the ’small town feel’ featuring historic buildings and bridges that lend great history to this small town.

3) New Orleans, Louisiana

Share of Homes with Increased Value: $53.62% Median Home Value: $148,000
It’s no surprise here that this cities market value is growing. With the impact of hurricane Katrina in 2005, the construction business has been booming. Building houses from the ground up. In addition to more jobs being created daily, this famous parish also receives federal incentives, insurance money and private investments to help restore it to it’s former glory!

4) Binghamton, New York

Share of Homes with Increased Value: 53.61% Median Home Value: $112,300

There’s a reason this city, located in upstate New York, made it to the number three spot in the nation and that is that it remained fairly dormant during the housing bubble where elsewhere prices sky-rocketed. So when bubble finally burst and most other areas saw huge pitfalls in home value, Binghamton stayed pretty level. Another big factor is the town’s University - one of the nations highest ranked public universities.

5) Fayetteville, North Carolina

Share of Homes with Increased Value: 53.23% Median Home Value: $119,800

Fayetteville is right next door to Pope Air Force Base and Fort Bragg and so it heavily relies on military families. But the town also features three colleges and universities, several museums and a historic downtown popular with tourists. Are we starting to notice a trend though with housing markets and universities…? It sounds like if you’re looking for a sure bet in today’s market… you might be best off moving to your nearest college town!

Other honorable mentions go to Pittsburgh, PA with an increased value of 48.80%, median home value of $108,700 and to Little Rock, Arkansas, increased value of 46.96%, median home value of $121,200.

What Is A Home Value Assessment?

August 28, 2009

What You Need to Know About Home Value Assessments

When trying to determine the current value of your home, there are a lot of similar sounding terms that are thrown around to help you do that. One of the most commonly confused terms is “home value assessment”. The reason for this is that it’s easily interchangeable with the term “home value appraisal”, but you might be surprised to find that there is actually a significant difference between the two.

A home appraisal is an optional service in which you pay a third party Apprasier to evaluate your home and determine the current home value. This is generally done by people looking to sell their home, get a home equity loan or those wanting to refinance their current mortgage.

A home value assessment on the other hand, is generally used to describe the process in which a local county official will assess the current condition of your home in order to determine the amount of property taxes you should pay. Therefore, it traditionally is associated with less appeal than an appraisal.

A home assessment represents a typical, or average value for a property in relation to other property values within a specific period of time. Depending on where you live, this time frame can vary from six months to two years! It is not usually associated with the current trends in the real estate market because the value of a particular property will depend on the sales of the other homes nearby . Assessments are NOT based on larger sales activity trends which you might see county-wide or within a zip code area.

Instead your assessment value will be based on typical values within your neighborhood. While the sale of a property will affect a home’s assessment, the effect will be diluted by the mass appraisal methods and results usually from within the past year. Consequently, this time lag means that the assessments of properties that have sold very recently may differ from the sale price which is generally based on appraised value and real estate market trends.

It’s also important to note that transitory elements such as neighbors who don’t mow their lawns, or are  consistantly noisy, will not affect your assessment. Whereas things like house construction, neighborhood boundaries and lot size remain relatively constant and therefore will likely play a factor in your home’s assessment.

Quick Facts

• An assessment is when the local government assesses your home value in order to determine how much property tax you should pay.

• Most government agencies do home assessments every 2-4 years, but can vary based on location.

• Home assessments are based on smaller, local areas such as your neighborhood versus larger trend tracking boundaries like counties and zip codes.

• An appraisal can be can be done by an actual Apprasier for a fee of  or by your local Realtor, usually free of charge!

• If you feel you’ve received an unfair assessment of your home, you can contact your local tax officials and contest any findings.

In the end, it’s good to know the major difference between home value assessments and home appraisals. And while there’s not a whole lot you can do to affect your home assessment, it is important to be prepared for any changes that may take place. Taxes: Just one of the many joys and responsibilities of home ownership!

Home Resale Value

August 24, 2009

We get a lot of questions from people asking us about the resale value of their homes. It’s an important part of both the buying and selling process. When shopping for a home, you need to keep in mind it’s potential resale value 5, 10, and 15 years down the road. If you’re selling, than your resale value is essentially your home’s current value.

In either case, it is always best to contact your local real estate agent. In addition to being a go-to resource for any questions about your home, you can also request a comparative market analysis or CMA. A CMA will list the sales activity in your neighborhood for up to one year. Here you can determine the percentage of homes actually sold out of all those listed and you can see the average amount of time it took for those homes to sell. If you compare your homes attributes to the similar homes on the CMA, you’ll be able to have an idea of where your home’s value will fall so long as you can avoid the emotional bias that eliminates the  objective judgment needed for your home. This, again, is where having a Realtor comes in handy.

If you’re looking to increase the resale value of your home, there are plenty of tips out there that can add value, but you want to be sure you get the best bang for your buck! Here is a list of popular renovations and their rate of return.

• Roof Replacement:

Avg. Cost = $14,000 - Rate of Return = 74% - Value at Sale = $10,360

• Bathroom Remodel:

Avg. Cost = $30,000 - Rate of Return = 75% - Value at Sale = $22,500

• Basement Remodel:

Avg. Cost = $55,000 - Rate of Return = 79% - Value at Sale = $43,450

• Major Kitchen Remodel:

Avg. Cost = $55,000 - Rate of Return = 83% - Value at Sale = $45,650

• 2nd Story Addition:
  

Avg. Cost = $110,000 - Rate of Return = 83% - Value at Sale = $91,300

• Window Replacement (Vinyl):

Avg. Cost = $10,000 - Rate of Return = 84% - Value at Sale = $8,400

• Window Replacement (Wood):

Avg. Cost = $11,000 - Rate of Return = 85% - Value at Sale = $9,350
(get more helpful information on custom window replacement from these Maryland replacement windows experts)

• Minor Kitchen Remodel:

Avg. Cost = $18,000 - Rate of Return = 86% - Value at Sale = $15,480

• Siding Replacement:

Avg. Cost = $9,500 - Rate of Return = 87% - Value at Sale - $8,265

Keep in mind these are averages and will be different based on the materials used and the styles incorporated. If you’re going for maximum return, keep your designs fairly neutral. You can add your personal style or flair by using accessories, pillows, art, etc, but you’ll want your over all design to appeal to as many buyers as possible to increase the resale value.