Two Months Left on the Tax Credit

Though the first-time home buyer tax credit has received the lion’s share of attention in the media, there is another tax credit that applies to millions of current home owners.

Qualified homeowners who have lived in their current home for at least five of the past eight years are eligible for a $6,500 tax credit to buy a home.

· Tax credit does not require repayment.
· Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000.
· Credit is limited to homes priced $800,000 or less.
· The home must be purchased as the primary residence.
· Buyers must secure a binding contract by April 30, allowing 60 days to close.

It is estimated that approximately 70 percent of home buyers qualify for some kind of tax credit when they purchase a home. If you’d like to find out whether you are one of them, please contact me.

New Listing -- 52 Acres -- Great Development Opportunity

Almost 52 Acres in Yelm...recently logged and ready for development. Buyer to do all due diligence. Creek runs through the property. Owner willing to carry contract for 5 years with 20% down. Call or text (360) 977-8329 for more details...or e-mail johnblom@johnlscott.com. Look it up online at here.

Open House -- Sunday 2/28 -- 1-4 PM

3 bedroom, 2 bath home just blocks from the neighborhood park. Meticulously landscaped back yard and a 3 year old roof gives this house great curb appeal. You won't be disappointed inside, either, with an open floor plan and vaulted ceilings. Don't miss the chance to own a great house in the convenient Fisher's Landing Area.

2012 SE 178th Ave

Hosted by John Blom, John L Scott Real Estate
johnblom@johnlscott.com
Call or text (360) 977-8329 for more information

Open House -- Saturday 2/27 -- 1-4 PM

4 Bedroom, 2.5 bathroom home for $234,900. Over 2600 square feet...lots of space for your dollar. Formal living/dining room and a separate family room with fireplace and built-in cabinets.

6606 NE 51st Circle
MLS #10011881

Directions: From Andresen, go west on 58th St. Turn left on 66th Ave, then left on 52nd St. Make a right at the T and follow around to the cul-de-sac.

Hosted by John Blom, John L Scott Real Estate
johnblom@johnlscott.com
Call or text (360) 977-8329 for more information

County is unique and better for it | The Columbian

Julia Anderson, business editor for the Columbian, is retiring. For her farewell, she wrote an excellent article describing the changes she has seen in Clark County since she started writing for the paper. Her piece gives a wonderful description of the county's character:

Residents here have a can-do spirit, are proud of their communities, their schools, their roads and their parks. They vote for libraries, support a range of charities and generally care about stuff.

So it’s no surprise that this community has produced a diverse collection of enterprising employers, both private and publicly owned. Among them are The Holland Co., operator of the Burgerville restaurant chain, Beaches Restaurant & Bar, Riverview Bank and First Independent Bank, Sharp Laboratories in Camas, Beacock’s music store and AHA!, the Vancouver marketing company. And how about Wacom Technology and Dotster. Add to that mix Clark College, Washington State University Vancouver, some great K-12 school districts and Fort Vancouver Regional Library. You’ve got a dynamic, creative, forward-looking community. A business news reporter couldn’t have it any better.

Here's a link to the full article.

RMLS Market Action Report

The RMLS released the January 2010 Market Action Report this week. Here are a few highlights:

• Compared with January 2009, average sales price increased 4.2%
• Closed sales increased 34.8% and pending sales went up 20.2% over the same period
• Months of inventory jumped from 7.6 to 12.4, the first time inventory exceeded 12 months worth since February of 2009

If you would like more information on the current market, or a copy of the full Market Action, please feel free to e-mail me at johnblom@johnlscott.com.

Interest Rates and Purchasing Power

Though it appears that we are on the tail end of the recession, many of us are hesitant to make large financial leaps. If you are thinking of buying a home, rising interest rates could be your best reason to get off the fence and act quickly.

Interest Rates
Interest rates have been near 5% for the last several months and have been rising slightly over the past several weeks. The graph to the right shows that an increase in just one or two points can diminish your purchasing power by $100,000 or more.

In addition, the cost of borrowing money is on the rise. A homeowner with a $350,000 loan will pay $7,000 more in interest if rates rise from 5% to 7%.

Home Prices
Because of moderating home prices, we are seeing greater home affordability. However, high demand created by home buyer tax credits could cause home values in the lower price ranges to rise within the year, resulting in a ripple effect up the price points.

Mortgage Rates Drop Below 5% - WSJ.com

Mortgage Rates Drop Below 5% - WSJ.com

Mortgage rates continue to be incredibly low. According to the Wall Street Journal, the national average is back below 5%.

Home Buyer Tax Credit Information

Here is some information from the IRS regarding the Home Buyer Tax Credit extension that was passed last November. Did you know, if you close on a home before you file your taxes, you can claim the credit on your 2009 return?

Here is a link to the article on the IRS Web Site

The Worker, Homeownership and Business Assistance Act of 2009 was signed into law November 6, 2009.

If you are in the market for a new home, you may still be able to claim the First-Time Homebuyer Credit. This new law extends and expands the first-time homebuyer credit allowed by previous legislation. Here are key points the IRS wants you to know about the expanded credit and the qualifications you must meet in order to qualify for it.

1. You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.

2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.

3. For qualifying purchases in 2010, you will have the option of claiming the credit on either your
2009 or 2010 return.

4. A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.

5. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250. The maximum credit for first-time homeowners is $8,000 (up to $4,000 for married filing separately).

6. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.

7. The IRS will issue a revised Form 5405 to claim this credit on 2009 tax returns. The revised form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.

8. Homebuyers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return. For homes purchased in 2009 there is an option to take the credit on an original or amended 2008 tax return.

9. The new law includes documentation requirements. See revised Form 5405 for details.

10. No credit is available if the purchase price of the home exceeds $800,000.

11. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.

12. A dependent is not eligible to claim the credit.

IRS encourages all eligible homebuyers to take advantage of the First-Time Homebuyer Credit but at the same time cautions taxpayers to avoid schemes that help ineligible people file false claims for the credit.

Visit IRS.gov/recovery for more details on the First-Time Homebuyer Credit. Forms are available on www.irs.gov or by calling the IRS at 1-800-829-3676.

January Market Trends, Part Two

Here is some more information on the market trends. The best news is in regard to pending sales, which are up 37.4% over last year.

January Real Estate Trends

Getting Back to Normal?

The real estate market has been on a crazy ride over the past decade, with dramatic booms and busts. However, many indicators seem to show that 2010 could be the first year in a, dare we say, “normal” market cycle.

Home Valuations

In spite of wild housing valuation swings over the past several years, current valuations in Clark County are 10-20 percent higher than 2004 levels, depending on specific locations and price points.

Affordability

As you can see in the graph to the right, housing affordability is approaching a normal level. Though early 2009 saw historically high affordability due to a market overcorrection, the last two quarters of the year and projections for 2010 show we are headed toward more normal territory.

Transactions: The 5 Percent Rule

A study by REAL Trends found that, on average, 5 percent of households turn over each year. Boom years see a few more, bust years see a few less, but about 5 percent of Americans buy and/or sell a home each year. A recent study estimates that 5 percent of Americans plan to buy or sell their home in 2010, which means 2010 should be closer to an average year for home sales.

Absorption rates

Absorption rates—a percentage that shows the relationship between pending sales and inventory—were moving toward stabilized levels of 20-30 percent during the last few months of 2009. In general, rates above 30 percent signal a sellers’ market, while rates below 20 percent means a buyers’ market. Projections for the early months of 2010 seem to keep us on this balanced rate of sales.

The general consensus is that we are now at the tail end of a recession, and we still have some residual economic factors to work through. But near historic low interest rates, great affordability, and home buyer tax credits should help push us through the wake of the past few years’ ups and downs into a more stable market