The President of the United States has signed a bill into law that will give many home shoppers the extra push they need to get off the fence and into a home of their own. If you are a first-time home buyer, you should definitely investigate the possibilities.
The Housing and Economic Recovery Act of 2008 provides a tax credit of up to $7,500 if you buy a home. A new Web site, www.FederalHousingTaxCredit.com, explains how this important incentive works. Here are the provisions in a nutshell:
• Qualifications. The tax credit is available for first-time home buyers, which under the Act also includes people who have not owned a home for at least three years.
• Income limits. The credit can be as much as $7,500 but is decreased depending on how much money the potential home buyer makes. To receive the full tax credit amount the income limits are $75,000 a year for single tax payers and $150,000 for married taxpayers filing joint returns. For partial credit the upper limit is $95,000 and $170,000 respectively.
• Time limits. To qualify, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs – the date when title transfers.
• The way credits work. Qualified home buyers claim the credit when they file their income tax return – no additional application or certification is required. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. A taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.
• Payback. You can look at this tax credit as an interest free loan with up to 15 years to pay it back. For example, a home buyer claiming the full $7,500 credit would repay the loan at a rate of $500 a year. There are exceptions, of course, but all that is explained on the Web site.
Www.federalhousingtaxcredit.com also includes links to the resources you need to help make buying a home easier, including information on the home buying process, financing and new home listings.
Homeownership has always been the cornerstone of the American dream, and it remains the best way for a family to build wealth over the long term. The Housing and Economic Recovery Act of 2008 is also designed to help struggling home owners avoid foreclosure and keep their homes and provide a boost to the housing market and economy overall.
The new legislation combined with current market conditions gives home buyers the opportunity of a lifetime to get into the home of their dreams. Interest rates are still at near-historic lows, and due to the housing downturn, there is a large selection of homes on the market to choose from, and prices are more competitive than they have been in years.
But this opportunity won’t be around forever.
Remember that you need to purchase and settle on your new home before July 1, 2009. As homes currently on the market sell, there won’t be a lot to choose from for the next couple of years. And as fuel and material costs and demand for homes goes up, so will prices.
More than two and half million home owners and home buyers will benefit from Housing and Economic Recovery Act of 2008. To find out if it can help you, visit www.FederalHousingTaxCredit.com today. Learn about home buying opportunities in Colorado Springs by visiting our website at www.campbellhomes.com
Wednesday, October 15, 2008
Top Reasons you shouldn't wait to buy a new home
1. $7,500 FEDERAL TAX CREDIT.
For a limited time only, qualified first-time buyers can receive a tax credit. www.federalhousingtaxcredit.com
2. LOW INTEREST RATES.
Rates remain at near-record lows; you can lock in a payment that fits your budget.
3. UNBEATABLE INVESTMENT.
Even in down markets, over the long term home prices still appreciate more than the stock market.
4. AVAILABLE LOANS.
Lenders are still eager to make loans to borrowers with good credit.
5. GREAT SELECTION.
With so many homes on the market, you can get the features you want!
6. ENERGY EFFICIENCY.
New homes have advanced technology and environmentally-friendly features that can help you save money.
Is it really easy being green?
Is it hard to build green? Is it a lot more expensive? Do you have to live in a straw-bale cottage or some other strange building to say you’re a green home owner? No, no, and most decidedly no!
The National Association of Home Builders’ (NAHB) Model Green Home Building Guidelines are about to celebrate their second birthday. Designed to help bring residential green building into the mainstream, the Guidelines also demystify the process and debunk the myths of green building for consumers – and for home builders.
Using the Guidelines, local home building associations are creating regionally appropriate green building programs for interested builders, and that interest is growing rapidly. Twelve state and local associations have launched voluntary green building programs, with another dozen on the way.
The Guidelines include an easy-to-follow checklist to make sure the builder is incorporating all aspects of green building into each project. That makes it easier to build green – and that’s the beauty of the voluntary Guidelines.
Is it more expensive to build green? Experienced builders say it doesn’t have to be. Guidelines-based programs award points for resource efficiency, and if you’re using fewer materials, you’re saving money, they point out. And some green building ideas – like positioning a home’s windows to best take advantage of natural light – don’t cost any more than conventional building – and save money for the homeowner.
Nor does green building consist of neighborhoods filled with yurts, underground bunkers or geodesic domes. When a house is green but looks like other houses in the neighborhood – and can be replicated by large-scale building companies – then we know green is mainstream. We’re seeing that happen right now.
There are more green building products than ever. Easier to use insulation, chemically neutral paints and flooring and natural landscaping products are no longer difficult to find. Most home-improvement stores carry a full line of compact fluorescent bulbs, which use 70 percent less energy, and advances in solar roof panels and shingles, wind turbines, and efficient appliances make green technology less expensive than even a few years ago.
But there are scattered gray clouds on a mostly green horizon. Efforts to mandate green building are the perfect example of good intentions gone awry. Green building needs to stay voluntary to continue to allow for market innovation and to make sure that the additional money spent to build ‘green’ goes to building improvements, not excessive certification fees. NAHB discourages efforts to dictate and legislate what constitutes acceptable green building practices because the building science in this area is still evolving. We don’t want to see this dynamic process frozen in place.
Homebuyers don’t have to wait that long to learn more about being green: download a free guide at www.nahb.com/greeninnovation – or contact your local home builders association to find a green builder near you [www.cshba.com]. To sign up for NAHB’s free consumer e-newsletter, visit www.nahb.org/housekeys.
Thursday, August 14, 2008
If you haven’t heard now is a fantastic time to buy a new home! The federal government has just made it easier for first time homebuyers to purchase a new home with the Housing and Economic Recovery Act of 2008 which essentially gives an interest free loan of up to $7,500 for qualified first-time homebuyers purchasing a home on or after April 9, 2008 and before July 1, 2009.
Any homebuyer, who has not owned a home in the past 3 years, is an American citizen and files taxes are eligible for the tax credit. Even some non-citizens may be eligible for the credit.
Common consumer questions:
Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
For more information about this program visit www.federalhousingtaxcredit.com
Wednesday, July 30, 2008
Best Cities to Live, Work and Play
Best Cities to Live, Work and Play
These ten great places will only get better.
From Kiplinger's Personal Finance magazine, July 2008
No. 1: Houston,Texas
No. 2: Raleigh, N.C.
No. 3: Omaha, Neb.
No. 4: Boise, Idaho
No. 5: Colorado Springs, Colo.
No. 6: Austin, Texas
No. 7: Fayetteville, Ark.
No. 8: Sacramento, Calif.
No. 9: Des Moines, Iowa
No. 10: Provo, Utah
Read Whole Article
Wednesday, June 11, 2008
Interview with a top Realtor in Colorado Springs
There is a lot of negative media out there that talks about how bad the real estate market is. Is it as bad as they are saying?
The market is not bad at all. If someone on your weather channel told you it was going to be cold and rainy all across the USA today would you believe them? Of course not. It is the same for our economic situation. You cannot talk about the whole country. We are huge and different areas of the country have been affected differently than from other areas. We have been very blessed here in Colorado. We have had a slight correction to the market of approximately 3-5% depending on what area of town you are in. My little company of 40 agents sold over 30 million dollars in homes in the month of May. Does that sound like a bad market? I don’t think so.
What are the advantages of buying a home in a “buyers market” like we are seeing now?
It is a wonderful time to buy. There is a bountiful selection of homes both resell and new to choose from. Interest rates are staying right around 6% or less. This is an amazing interest rate. Sellers and Builders both are being creative and giving some wonderful incentives. I would encourage anyone, that this is a perfect time to take that step forward.
BJ you have a long history working in Real Estate. In your experience how long does a down market last and when do you think we will see a shift in the current real estate market?
We have down markets just about every 7 years. It usually takes over a year to reach its lowest level but bounces back quite quickly. This is what I see happening right now. The market is turning and going back up and FAST.
What is one of the number one things you see/hear families are looking for when buying a new or resale home?
What most families are looking for in a new home is a good location with good schools and a livable floor plan. Most of the families I work with are wanting more open floor plans, lots of windows for light, and a decent size yard but not too big. With the cost of watering and taking care of big yards, they are more of a disadvantage. Most families would prefer to live close to a park or community open space for the kids to throw the ball around.
What are some of the advantages of using a professional real estate agent like yourself?
Using a real estate agent is smart. It does not cost the buyer one extra penny to use an agent. The builder or seller pays for the buyer to have one. It is wonderful to have someone look out for your best interest. It is especially good to have one that has many years of experience and knows what to look out for. Buying a home is the biggest #1 investment you will make in your life. You need someone experienced and someone knowledgeable to help you with that important decision.
Are there any other insights you would like to add about the current real estate market or about buyer’s attitudes today?
Don’t believe everything you read or hear in the media. Unfortunately “bad” news sells and good news doesn’t. Would someone please explain that one to me? The last thing I would like to say is, we live in one of the most beautiful places in the entire world. Why not own a piece of it. You will never regret it.
BJ Burns has been practicing real estate in the Pikes Peak region for over 23 years. Through her dedication to serving her families BJ has built a reputation of integrity. BJ currently offices with The Platinum Group of Realtors. For more information about BJ Burns please visit her online at www.bjburnsteam.com or you can contact her at 719.536.4301.
Tuesday, May 27, 2008
The Rule of 72
I have heard a lot of talk about when is the best time buy a home. Is it now while the market is a buyer’s market or should one wait because prices may go down even more? I would like to address this issue with the law of 72. Created by Albert Einstein, the Rule of 72 is a mathematical shortcut used to determine how long it will take for an investment to double. This rule is widely used in Real Estate to determine when the value of homes will double in the market. I will be using this rule to highlight why now is the best time to invest in a home rather than later.
The formula is:
Years to double = 72/ interest rate
Although for the purpose of calculating real estate we will use appreciation rate rather than interest rate.
The average appreciation rate in Colorado Springs: 5.8%
Years to double = 72/5.8
Years to double = 12 years (rounded)
Therefore:
The median prices of new homes in Colorado Springs:
Now (2008): $264,995
In 12 years (2020): $529,990!!
This is a substantial increase in median home prices. The obvious choice would be to invest in real estate now while prices are still low. Still not convinced that the law of 72 holds true? Let’s take a look at some historical data:
In April 1996, 12 years ago, the median price of a home in the United States of America was $140,000. This past April (2008) the median price of a home in the United States of America was $246,100. that is an increase of $106,100 also seen as a 5.6% appreciation rate.
Historical trends have always shown the real estate market increasing in price. Despite many people over the years stating that real estate being a bad investment, it would seem that real estate is not only a great investment but NOW is a better time to buy than tomorrow because prices have historically gone up AND mathematically been predicted to go up.
For more information about the Rule of 72, Real Estate in Colorado Springs, or Campbell Homes new homes being built in Colorado Springs and the Pikes Peak region feel free to contact me at knoble@campbellhomes.com.
Wednesday, May 14, 2008
The Truth is Out About the Housing Market!
The media has been reporting for sometime that the housing market is bad and that now is not a good time to buy a new home. I beg to differ. With interest rates at an all time low and the supply of new homes starting to decline it’s only a matter of time when supply and demand take effect and prices will start to climb again. It’s a known fact that when demand is high and supply is low prices rise. Therefore NOW is the best time to purchase a new home since prices are reasonable and stable, and there is still enough supply of homes to suffice for the demand that we are starting to see. The following is a fantastic article from REALTY TIMES covering this very topic.
Columnist: 'Media Is Wrong About Housing Slump'
Realty Times feature article by Blanche Evans
Why buy a house now? You've been getting bad information. Here's why.
The financial press is worried that they might have gone too far - paralyzing the nation into recession by piling on housing. So they're finally beginning to question the indexes where they get their data, and whether the news is really as bad as it seems. Slowly but surely, headlines are changing from Don't Buy a Home Now to Is It Time To Buy?
We said it here first on Realty Times - that consumers aren't getting the full story. Indexes can be misleading because of the locations, prices, types of housing, and rates of increase they track.
In late April, Robert Shiller, founder of the Case-Shiller Index, announced that there was a good chance housing prices would fall further than the 30 percent drop during the Great Depression.
Shiller has plenty of reason to be negative - he makes money when people buy housing hedge funds, licensed with data obtained through his company Macromarkets LLC.
Now, finally, one brave journalist is writing that Case-Shiller is flawed.
In his story "Home-price data has its flaws," Chris Plummer of MarketWatch slammed both Shiller's Index and the Associated Press for being "grim reapers."
For the first time, S&P Index Committee Chairman David Blitzer "acknowledged his organization's overall and metro-market readings paint an incomplete picture."
No kidding. The index covers only 20 markets, heavily weighted to the most volatile metros in the nation.
Plummer also lampooned the AP for writing that "despite that index's limited seven-year history, home prices plunged by a record percentage at their fastest rate ever."
He also notes, "The glaring discrepancy in this case is that 17 of the 20 metro areas posted record annual declines, and yet 78 percent of the 330 metropolitan regions that the NAR tracks reported price increases ... "
Bravo, Plummer. But the rest of the financial press still has a long way to go.
When Shiller says home prices are going to fall 30 percent, not one reporter who covered the story asked this simple follow-up question: "Bob, during the worst part of the Great Depression, one in four people were out of work. Our unemployment rate is a little over 5 percent. So what's going to drive home prices that low?"
Instead, no one did even the minimum Wikipedia search to find out what conditions were really like 75 years ago.
What that means is not only are the indexes misleading - the reporting is worse.
Right now we have mortgage interest rates three points below historical norms. We have housing inventories five months greater than balanced markets. Combine that with unemployment that is a half percent lower than the recession of 2003, and you have excellent homebuying conditions.
Stop listening to the media. Go buy a home.
Copyright © 2008 RE/MAX International Inc. 5/6/08
Thursday, April 24, 2008
Buying a New Home In Today's Market
There are many steps you need to take when buying a home but many Americans fail to realize that homeownership is actually more attainable then they might thing.
Top 5 steps of buying a new home.
Figure out how much you can afford.
When if come to buying a home it’s not a guessing game it’s a numbers game. How much you can afford is based on income, credit, currently expenses and the interest rate. Most people use a online mortgage calculator to figure this out but those numbers really do not drive into the issues of credit, expenses, income, or what mortgage plan you will qualify for. The best way to figure this out is by talking to a mortgage professional. If you are in Colorado Springs or plan on buying a new or used home in Colorado Springs I would recommend you call Donnie at Peoples mortgage.
Examine your needs
You really need to think about what you need in a new home or new neighborhood. If you are retiring and this is the last home you will live in then you might want to consider a ranch floorplan. If you have school aged children then researching the schools and looking into neighborhood parks and recreation might be important. Knowing your priorities before you shop will make it a lot easier to narrow down your search for a new home.
Decide on if you want to uses a REALTOR on go it alone.
If you are new to a town or think you will be wanting to look at ALL your options, a REALTOR is a great friend to have. Real Estate Agents know the areas inside and out. They know prices, neighborhoods, schools and usually are great at matching families up with communites that just fit. But be aware that not all REALTORS are made for your needs so makes sure you pick one you are comfortable with, and that represents you well before you sign any agreements. If you are buying a new home in Colorado Springs I would be happy to point you in the direction of some of the BEST Real Estate Agents in town.
Shop
Now for the fun part! Shopping for a new home can me tons of fun but if you don’t have an idea of what you are looking for before you start you can get burned out pretty quickly. Will you buy new or used? What side of town, what time of floorplan? It can be taxing but again if you do your homework before hand you could find your perfect match in a few days. In Colorado Springs there are several homebuilders and even more resale homes so have a game plan and get out there and have fun!! Oh most new home builders offer cookies in their models (just a hint). Feel free to read my blog about the advantages of buying new.
Buy
Okay it might not be all that simple but when you find that home that fits most of your wants and all of your must haves then you need to make an offer and sign the paperwork which will put you in the fast lane to ownership! YEA! You are almost done and yet the steps that follow the purchase agreement are the most stressful sometimes because you have to do a lot with mortgage people and paperwork. But I promise when its all said and done you will be so happy you got through it all because there is nothing better than sitting down in your new house and knowing this is all yours!!
