Parsons Real Estate Group

Blog

October 2008 Archives

Home sales remain strong, Inventory continues to balance.

Posted by Mike Parsons
October 22, 2008 at 07:17 PM

The central Ohio housing market continues to stabilize as home sales are maintaining levels similar to last fall,
according to the Columbus Board of REALTORS®.
Locally, there were 1,824 homes sold in September, just 1.5 percent behind the 1,851 homes sold during
September 2007.
“The difference in sales of only a handful of homes demonstrates the stability of central Ohio’s market at a time
when many other markets nationwide are struggling,” says Greg Hrabcak, President of the Columbus Board of
REALTORS®.
“Sales are not as high as they were during the boom years but they are in keeping with pre-boom levels,” says Hrabcak.
“That, in and of itself, is really good news, because theoretically, we should be experiencing much lower sales to
compensate for the inflated numbers we saw back in 2004, 2005 and 2006.”
Last month showed more positive news for home sellers as well. As fewer homes were added to the market in September than in August, the number of homes for sale continued to decrease. With 16,598 homes on the market in September, the area’s inventory was at its lowest point since February,
“The housing market follows the same basic principles of supply and demand, so as inventory continues to decline from what were record high numbers just a few years ago, sales prices will increase and central Ohio will again see a market that is balanced in favor of both buyers and sellers,” Hrabcak added.
The average sale price of a home in September was $160,755, down 4.5 percent year to date, but only 1.7 percent behind what the average home sold for last September.

Great incentive: 5% financing with 3% Downpayment

Posted by Mike Parsons
October 07, 2008 at 08:26 PM

Hey folks! If you are a first time home buyer, chances are you are using FHA financing. Wells Fargo has come out with a new program that buys down your market interest rate 1% for the first year. This buy down or temporary interest rate reduction doesn't cost the buyer any money. If the current interest rate is 6%, your first year interest rate will be 5% and change to 6% fixed for the next 29 years. This is a great bonus compared to anything else I have seen out there currently. If you have any questions you can email me or contact Dave Dikeman with Wells Fargo at 614-310-1126 to learn more.

$7500 First Time Homebuyer Tax Credit and OFHA

Posted by Mike Parsons
October 02, 2008 at 12:20 AM

One of the most exciting new provisions of the Housing and Economic Recovery Act of 2008 is the First-Time Homebuyer Tax Credit. The credit is designed to encourage first-time homebuyers to go ahead and make the leap to purchase their first homes. Combine this tax credit with the fact that home prices are at historical lows, and indeed it is an ideal time for many first-time homebuyers to purchase homes.
Here are some things to keep in mind:
The credit is available for homes purchased between April 9, 2008 and July 1, 2009
The credit amounts to 10% of the purchase price of the home not to exceed $7,500
A first-time homebuyer is defined as someone who has not owned a home in the last three years
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
The tax credit works like an interest free loan and must be repaid over a 15 year period
How does a tax credit work?
A tax credit is a special provision that reduces income tax liability on a dollar for dollar basis. When filing a tax return, you must include income items, deduction items and the number of exemptions, among other things, to figure your total tax liability. If your total tax liability ends up being $7,500, and you qualify for the full $7,500 tax credit, this credit would be applied and would wipe out all of the tax due. If your employer had already deducted the $7,500 from your pay checks throughout the year, you would receive a tax refund of $7,500.
Does the credit have to be repaid?
Yes, the credit does have to be repaid, so it is really more like an interest free loan. Homebuyers 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 homebuyer 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.
Conclusion:
For more information about the first-time homebuyer tax credit or other changes resulting from the Housing and Economic Recovery Act of 2008, just give me a call. I would be happy to assist you with your mortgage in the purchase of your new home!
$7500 Tax Credit with Ohio Bond Money
The Housing and Economic Recovery Act of 2008 (H.R. 3221) prohibits the use of the $7,500 new First-Time Home buyer Credit in conjunction with tax-exempt Mortgage Revenue Bonds. Because the OHFA First-Time Home buyer Program is financed with tax-exempt Mortgage Revenue Bonds, homeowners who use the OHFA program are not eligible for the credit.
If you are a first time homebuyer and qualify for bond money, it still may better choice than the tax credit. Remember the tax credit has to be paid back. It will depend on your circumstances.
Best regards,
Michael Reeve, MBA, CMPS®
The Guernsey Bank, Vice President
614-547-1570 x307
mreeve@guernseymortgage.com
guernseymortgage.com

_