New Tax Credit Info!

The Senate voted last night (11/4) to extend and expand the tax credit for homebuyers that was scheduled to expire Nov. 30. The House is expected to schedule a quick vote on the bill as early as today 11/5 as part of a package that also extends unemployment benefits for people out of work more than a year. The White House indicated that the President will sign the legislation.

How the homebuyer tax credit would work:

· Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.

· Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.

· Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.

· Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

· How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.

· New anti-fraud limitations imposed.

· Cost: $10.8 billion.

Source: Bloomberg Press and Associated Press and confirmed information with the content of the Senate bill

Has the Market Hit Bottom Yet?

Has the Market Hit Bottom Yet?

LAS VEGAS – The sluggish housing market will likely hit bottom in 2009 before picking up slightly by year's end, economists said Tuesday in a Housing Economic Outlook press conference at the International Builder Show. Chief Economists David Crowe of the National Association of Home Builders, David Berson of the PMI Group, and Frank Nothaft of Freddie Mac offered up their forecasts for the housing market for 2009. (Read the latest commentary from Lawrence Yun, NAR’s chief economist.)Berson had a more sobering forecast, saying that it would likely take 2 to 3 years for housing prices to stabilize and the market recovery to begin. The housing market currently lacks a much-needed spark: more than 1.5 million empty homes are for sale in the United States (new homes make up about a third of that inventory), housing starts are at record lows (200,000 for single family homes this year; off the 1-1.3 million pace for starts), consumer confidence is dwindling amid rising unemployment and loan delinquency rates, and skyrocketing foreclosures are driving housing prices down leading to excess inventory, the economists say. "It's making it very difficult for builders to sell homes when they have fixed costs to recover," Crowe said. To counter, builders have reduced prices, added amenities to homes at no extra cost to buyers, and more than 80 percent are using incentives to try to move the high inventory. "We do expect 2009 to be the bottom," Crowe said. Housing starts will likely fall another 20 percent and new home sales will drop 14 percent, he predicted. Signs for a TurnaroundBut there's some good news within all the dim reports, the economists say.
Mortgage rates are at historic lows. Long-term mortgage rates last Thursday were reported at the lowest in the 50 years they’ve been recorded - 4.96 percent.

Households are growing. The Echo boomers – children of the baby boomers -- are getting ready to buy homes, ready to make up a big demographic of buyers, which will lead to a higher number of households.

Housing prices have fallen and affordability is at its best levels since the 1970s, Berson said. Despite a tightening on credit in recent months, Nothaft said mortgages are ample for those who have a down payment, decent credit score, qualified underwriting, and a conforming loan balance. Credit standards are moving back to what they were 10-20 years ago – it just means once you graduate from college you might not be able to buy a house right away. --

By Melissa Dittmann Tracey for REALTOR Magazine



Nick Arntz Hutchinson and Arntz Re/Max Results
15451 Founders Lane Apple Valley MN 55124
C: 612.991.0079 D: 952.223.1023 1-800-288-0863
arntz@arntz.com www.hutchinsonandarntz.com

Top 10 Housing Markets

Top 10 Most Promising Housing Markets

Housing Predictor, which provides housing forecasts in 250 markets, has identified 10 markets where the regional economies are healthy and have strong potential for increasing prosperity.These housing markets have bucked the national trend in 2008 and avoided the subprime crisis, the consultancy says.Whatever the future holds for the housing market as a whole, Housing Predictor forecasts that these cities will continue to see steady, dependable growth.Top cities and the percentage sales prices have increased so far in 2008.


Biloxi, Miss., 4.9 percent
Salem, Ore., 4.7 percent
Bismarck, N.D., 4.6 percent
Spokane, Wash., 4.4 percent
Yakima, Wash., 4.1 percent
Austin, Texas, 4.0 percent
Grand Junction, Colo., 4.0 percent
Fargo, N.D., 4.0 percent
Mobile, Ala., 3.9 percent
Albuquerque, N.M., 3.5 percent



Source: Housing Predictor (11/15/08)

Going Green in Housing

Home Owners Willing to Pay More for Green

Consumers are willing to spend money to go green if it helps them sell their homes, according to a Better Homes and Gardens Real Estate survey.About 48 percent of home owners would spend $2,500 or more to green up their homes for resale, the survey found. One-third say they would be willing to spend $5,000 or more on green improvements to make their homes more appealing.Meanwhile, about 36 percent of respondents identify cost as the chief reason they aren’t going green. Consumers seemed to be well-informed about green home trends, though. According to the survey, 82 percent say they are informed and understand green issues.

Source: Better Homes & Gardens Real Estate (11/13/08)

www.hutchinsonandarntz.com

Weekly Market Activity Report

Weekly Market Activity Report

There is further evidence that home sellers (both traditional and lender-mediated) in the Twin Cities housing market are becoming more successful in attracting buyer interest by pricing their properties attractively from the get-go. This is having the bonus effect of limiting further extension of market time and reducing the number of price concessions. For instance, the Average Days on Market Until Sale in October was 141, down from last year by 0.8 percent. This is the first year-over-year decline in market time since we began tracking the figures in 2006.

Similarly, the Percent of Original List Price Received at Sale in October sat at 91.3 percent. While still down from last year, it is only down 1.9 percent, compared to the more robust drops of 4 percent or higher seen during most of 2008. In other words, the market is still tilted in the buyer's favor, but sellers and banks are responding with more realistic prices at the time of first listing.

For the week ending November 1, there were 21 percent fewer new listings than there were at this time last year, and 1.4 percent fewer pending sales. This is the first downward year-over-year movement in pending sales since June.

The Housing Affordability Index has increased slightly in November to 161, while November's Months Supply of Inventory shows a drop to 9 months.

Click her for Market Report Details - PDF

Title Insurance

Title Insurance

Lenders always require that the buyer pay for a Lender’s Policy of Title Insurance, there is no law or other requirement that the buyers also purchase an Owner’s Policy of Title Insurance. Nevertheless, except in those few instances in which a buyer will have a lawyer prepare a Title It is advised to have buyers purchase an Owner’s Policy of Title Insurance. Otherwise, if a title defect is later discovered, the buyer will be responsible for correcting it. That can and often does involve thousands of dollars in fees.

Prior to the closing, the title insurance company will issue a “Commitment”. That is essentially a preliminary statement as to the status of the title. It is important that the buyer have an opportunity to see that Commitment before the closing. If it is sent to your Realtor, be sure it is promptly forward to you. If it is not sent to you, be sure to confirm that you has receive it from the title company.

Every Commitment includes a Schedule B which is often divided into B-I and B-II. The matters in Schedule B constitute exceptions to the title insurance. In other words, the Title Insurance Policy will not cover those matters. Often, if someone makes a request of the closer, she will be able to delete some of those exceptions, such as the “Standard Exceptions” and items that are being paid from closing, such as existing mortgages, liens and taxes. However, there are many items which will remain on the title to the property and cannot be deleted. Typical examples are Declarations of Protective Covenants and easements. If Schedule B refers to items of that nature, the buyer should have an opportunity to review the document which is referenced. Thus, if the Declaration prohibits the raising of pigs and chickens, the buyer should know that. Similarly, if the Declaration prohibits the construction of an out-building, a pool or a sports court, the buyer should know that.

Particular attention should be paid to easements. Most newer properties have easements along the rear or side five feet for utility and drainage. Those easements typically do not interfere with owner’s use and enjoyment of their property. However, some easements can be quite significant. Easements for such matters as gas pipelines, electrical transmission lines and conservation can dramatically limit how a person can use his or her property. If you see those types of easements in a Title Commitment, be certain to bring them to the attention of your Realtor.

Finally, if your is concerned about the Commitment or any of the documents associated with the Commitment, it is prudent for you to seek the advice of your own attorneys. Lawyers are trained to read and understand documents which affect the title to real property.

Short-term rates nearing historic lows

For the second time this month, the Federal Reserve has cut a key short-term interest rate, but the widely anticipated move was expected to have little immediate impact on mortgage rates.
In slashing its target for the federal funds overnight rate by 50 basis points, to 1 percent, the Federal Open Market Committee said a decline in consumer expenditures has "markedly" slowed economic activity.
Weaker prospects for economic growth, and declines in energy prices and other commodities, have the Fed expecting that inflation will moderate in coming quarters, providing leeway to cut short-term rates to near historic lows.
The Fed today also unanimously approved a 50-basis-point cut in the discount rate to 1.25 percent. The Fed also made emergency 50-basis-point cuts in the federal funds and discount rates on Oct. 8.
The federal funds rate -- the rate banks charge each other for overnight loans -- was gradually reduced to 1 percent after the dot-com stock market crash, where it stayed for much of 2003 and 2004. It has not been lower than 1 percent since 1958.
Cutting short-term interest rates is intended to stimulate borrowing. While some home equity loans are tied to the federal funds rate, most adjustable-rate mortgage loans are indexed to the London Interbank Offered Rate, or LIBOR.
LIBOR has remained elevated in recent weeks despite efforts by central banks around the world to make money more easily available, as banks remain reluctant to loan money to each other because of fears of insolvency.
Fixed-rate mortgage rates are largely determined by the willingness of secondary market investors to purchase mortgage-backed securities. Long-term mortgage rates, which have historically tracked longer-term investments such as the 10-year Treasury, have not come down in concert with Treasuries because they are in less demand by investors.
Fannie Mae and Freddie Mac, which guarantee most of the mortgage-backed securities purchased on the secondary market, are also major investors in them. Both companies are facing higher borrowing costs.
Holdings of Fannie's and Freddie's debt and mortgage-backed securities by foreign central banks plummeted by $47 billion during the four weeks ending Oct. 22, to $923.4 billion, Bloomberg News reported.