Real Estate Information

My new listing, just one week on the market, was featured today by Atlanta Homes & Lifestyles Magazine.

In additional to the fabulous renovation, impeccable taste, and meticulous attention to detail, this very special home is located on a wonderful street in Morningside.

Soon this home will be only be 12 houses from the new entrance to Piedmont Park, which is scheduled to open in the Fall of 2010. Another great feature to this street is Sidney Marcus Park, one of the best children’s parks in Morningside.  

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

If you read my earlier article “Right” from the start, you will have seen the statistics for the 2nd quarter of 2009 with a strong case for pricing homes right at the beginning of the listing period rather than price reductions.  In fact, the house I used as an example in that article was priced well from the start and went under contract after 39 days on the market with no price reduction required.

The 3rd quarter of 2009 tells a similar story about the importance of pricing a home correctly at the beginning of the listing period, and here are the results:
According to our First Multiple Listing Service (FMLS), for every 100 single family homes listed, 59 failed to sell at all.  Of the 41 that sold, 29 (70%) required price reductions in order to attract a buyer.  This means that 88 out of every 100 listings were overpriced in the 3rd quarter of last year.  When a home finally did sell after a price reduction, on average it required a total of 257 days on the market and the seller got on average 77.7% of the list price.

On the other hand, when a home sold without requiring a price reduction, the average list to sales price was 97.1% with an average of 25 days on the market.


       
graphic created by Chartmaster Services, LLC.

It isn’t always easy for seller to hear the truth about what their house is worth.  But keep in mind, good Realtors aren’t pulling numbers out of thin air to price houses.  A careful analysis of homes that have sold recently in the area and price range is the only way to know what buyers are purchasing with their dollars these days.  In fact, if a real estate agent is a “Realtor” they are required to follow a certain code of ethics and standards of practice for the National Association of Realtors.  Our standard of practice Article 1-3 states “Realtors, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.”  

If you need to sell, have hired a Realtor you can trust, and are able to sell your house for what it is worth, you are in a position to take advantage of a great buyers market in 2010!

Selling a home in the dead of winter might seem ill-advised, particularly considering the state of the economy, but some experts think that making the decision to wait until spring to list the property could be a mistake. Government incentives will likely have a big impact in 2010, with many buyers determined to sign a contract before the April 30 tax credit deadline. “This year, we’re anticipating sales will peak earlier,” says Nicole Hall, editor in chief of Lendingtree.com, an online home loan comparison service. “The best time to get your house on the market will be February or early March, and maybe even earlier if you want to avoid competition.”  Traffic on real estate Web sites begins to rise right after the New Year, says Ken Shuman, spokesman for real estate Web site Trulia.com. Source: Forbes.com

The National Association of Realtors expects existing home sales will rise 9.9% in 2010 to 5.71 million units, after falling 12.8% last year. The trade group’s updated forecast also calls for a surge in sales this spring as the newly extended and expanded homebuyer tax credit expires on April 30. Homebuyers that sign a sales contract before the end of April will have 60 days to close. NAR economists see sales surging to a seasonally adjusted rate of 6.03 million units in the second quarter before falling back to a 5.45 million rate in 3Q. Despite this optimistic outlook, a leading indicator of future home sales plunged 16% in November after rising nine consecutive months with the help of the first-time homebuyer tax credit which was due to expire Nov. 30 before it was extended. The uncertainty surrounding the tax credit legislation has been cited as a reason for first-time buyers staying on the sidelines. NAR reported that its ‘Pending Home Sales’ index fell to 96 in November from 114.3 in October. The PHS index is based on newly executed sales contracts with the closing expected to be completed in the next month or two. Source: National Mortgage News

As soon as Congress passed legislation to expand the $8,000 first-time homebuyer credit, readers started sending in questions about whether they would qualify under the new rules.

The legislation, signed into law last week, gives people more time to purchase a house and allows even current homeowners to receive a credit of up to $6,500 if they buy a new principal residence to replace the old one. It raises the income limits so more buyers qualify.

The new law also addresses concerns about fraud after a recent report found that the Internal Revenue Service had paid out millions in homebuyer credits to thousands of ineligible people, including some 4-year-olds. You now must be a certain age to get the credit and prove you bought a house.

Here are some answers on the expanded credit:

Who is eligible for the $6,500 credit?

This is for certain homeowners buying a new primary residence. Retirees downsizing are likely beneficiaries, says Mark Luscombe, principal tax analyst with CCH, a provider of tax information. You must have lived in your house for at least five years in a row any time during the eight years before the purchase of the new house.

The credit is worth 10 percent of the purchase price, not to exceed $6,500. Spouses filing separate tax returns can claim up to $3,250 each.

What's the new deadline?

To get the $8,000 or $6,500 credit, you must contract to buy the house by April 30, 2010, and the sale must close by June 30, 2010.

What are the new income limits? 

You will be eligible for the full credit if you're buying a house after Nov. 6 and your income is up to $125,000 for singles and $225,000 for married joint filers. The credit starts phasing out thereafter and disappears once income exceeds $145,000 for singles and $245,000 for joint filers.

Are there other restrictions?

You cannot claim the $8,000 or $6,500 credit if you buy a house for more than $800,000. You must be 18 years old, or at least your spouse must be 18 or older. You can't get the credit if you are claimed as a dependent by another taxpayer, says Mark Steber, chief tax officer of Jackson Hewitt Tax Service.

What documentation must I submit?

The IRS was criticized for handing out more than $139 million to filers who claimed the credit but hadn't bought a house yet. Now, you must attach a copy of the settlement statement with your tax return as proof of purchase.

How can I claim the credit?

If you buy a house this year, you can amend your 2008 tax return to claim the money early. Similarly, if you buy a house in 2010, you can claim the credit on your 2009 tax return, Luscombe says.

It now takes 12 weeks to 16 weeks to receive the money by amending a return. Steber suggests taxpayers might as well wait to claim the credit on their 2009 return than file an amended return.

What changes were made for members of the military?

Homebuyers must repay the credit if they sell the house within three years. But service members who sell their house because of a job transfer won't have to repay the money because of changes last week, says Jo Willetts, Jackson Hewitt's senior manager of tax resources.

Also, service members who are serving outside the United States will get an extra year to buy a house and claim the credit, Luscombe said.

If I was ineligible for a full or partial credit because of my income before, could I now claim the credit because of the higher limits?

The new income limits apply only to purchases after Nov. 6. Earlier purchases fall under the old rules, where the credit starts to phase out once income reaches $75,000 for singles and $150,000 for married joint filers.

I purchased a house in early 2005 that my wife and I are now selling. Can I obtain the new $6,500 credit? I'm close to the five-year mark but will be a couple of months off. 

Steber says "The code is clear about the five-year timing. Unless you can put off the closing for another four months, you will not currently qualify for the credit."
Copyright © 2009, The Baltimore Sun

During the second quarter in 2009, 59 listings out of 100 failed to sell in Atlanta’s intown market. Of the 41 listings that sold, 29 (70%) required a price reduction in order to attract an offer from a buyer.  That means, only 12 listings out of 100 were priced correctly to begin with.

But here is what is REALLY interesting...  The listings that were priced correctly to begin with sold with an average of only 22 days on the market and an average of 96.3% of the list price!  The listings requiring a price reduction sold with an average of 257 days on the market and the sellers only got 72% of the list price on average.  In fact, the sellers that required price reductions ended up getting less than if they had priced it right from the start.  

Simply put, pricing correctly with the current market means more money in your pocket, less hassle, and lower carrying costs.  Wouldn’t that be nice.  Having a listing agent who is aware of this and able to analyze the data specific to your house to help you price it right from the beginning is in your best interest.  

A great example of a house that is price right is my new listing at 66 Peachtree Hills Ave.  Check it out!

SOURCE: FMLS.  Single Family Detached Residences, Areas 21, 22, 23, 24, 31, 51, 52, 71, 132. 2nd quarter, 2009.