President Obama signed the new bill into law yesterday.

The new bill calls for an incentive for existing homeowners who have owned their current homes at least five years, making them eligible for tax credits of up to $6,500 when they purchase a new home.  First time home buyers or anyone who hasn’t owned a home in the last three years could still get up to $8,000.  To qualify, buyers
in both groups have to sign a purchase agreement by April 30, 2010 and close by June 30, 2010.

The credit is available for the purchase of principal homes costing $800,000 or less.  Vacation homes are ineligible.  The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000. The credit may be extended an additional year until June 30, 2011, for members of the military who serve outside
the United States for at least 90 days.

This is a nice opportunity to purchase in the event the recent timing may not have been conducive to purchase.  There is lots of inventory and the next 9 months offer many who may not have low credit scores or inadequate debt ratios.  Although the process is still primarily credit score driven, the extended incentive time for home purchases will be helpful to many who were not quite able to qualify last year.

The Northern Wasatch Association of Realtors  October issue of “The Voice” provided a brief report on the September 2008-2009 homes in Utah.  The total number of home sales year to date  is 3,802 and the average selling price was $241,260.  The low price was $11,500 and the high price was $875,000.  The number of homes sold declined from 2008 to 2009 in zip codes 84015, 84016, 84075, 84201, 84404, 84414, 84067, & 84315.  The selling price of homes followed suit, i.e., where there was a decline in number of homes sold, there was also a decline in average price.  The difference in the number and prices of sales among the remaining zip codes was minimal except for the higher end that existed in zip codes 84310, 84317, 84018, & 84050.

Given the data, much of the media suggestions that the nation is in recovery would appear to be less than accurate.  In my opinion, if  the seller does not have to sell, it would be wise to sit tight.  There is still a large inventory which continues to drive prices down.  It is a great time to buy, although there are still challenges for financing. I still am waiting for an answer as to where the bailout money is and why lending is still so tight.

Fall is my favorite time of the year.  I love the cold nights and the warm sun shiny days and cool air.  Autumn colors are breathtaking and all of nature seems to be getting ready for a long deserved rest.

I have found these links to be very informative relative to the soon to the expired  tax credit.  Also would like to ask you to look at three of my new listings – their diversity is quite interesting. Would appreciate your feedback! A beautiful home in Pleasant View can be seen at  http://www.circlepix.com/home/JGACFA, and one on Tyler Ave and one on Glasmann Way can be viewed at www.utahhomes.com/lorna.pedersen

• Update: Industry Makes Case For Home Buyer Tax-Credit Extension; Wall Street Journal
• Builders Urge Congress To Act On Home Buyer Tax Credit, Appraisal And Lending Issues; National Association of Home Builders
• Homebuyer Tax Credit Best Tool For Sustaining Housing Recovery, Says NAR; NAR
• Make The Home Buyer Tax Credit More Easily Available At Closing; RISMedia
• 1.4 Million Families Have Taken Advantage Of First-Time Home Buyer Tax Credit, More Claims Expected; RISMedia

Keep in mind that even if you are not a first time home buyer, now is an excellent time to purchase or invest. Interest rates as of today remain stable at 5% and home prices are more affordable.

Thought I would pass along this concise info on the continuing saga of the “Short Sale,” brought to you by Axiom Financial. “Short Sale” sounds so much nicer than “Foreclosure” but is it? A short sale is when the lender, investor and/or mortgage insurer approves the sale of a property to a new buyer for less than the original amount of the mortgage loan. The myth is that a short sale is better for your credit than a foreclosure and is not the case. A short sale carries the same 200-300 point hit to your credit score as a foreclosure and will remain on your credit report for seven years.

But there is hope!  Rebuilding your credit will be critical in purchasing a home in the future after the specified waiting period. The waiting period varies and begins the day the title of the home is transferred back to the lender or new buyer depending on the type of financing – FHA is 3 years, VA and Conventional are 2 years.  It can be a long grueling process, so make sure to get a mortgage professional involved early on in the process.

Hello!

Lots of people are asking how the first time home buyer tax credit works.  Until recently, the money from the tax credit was not realizable until tax time and was originally a loan against your annual taxes. That has changed and on September 9, the Utah Association of Realtors published the following update:

“Home buyers who use a Utah Housing Corporation loan can now use the first-time home buyer credit to help with their down payment and closing costs through a new monetization program called Equity Now. Under the program, home buyers will take out a first and second mortgage, which can be up to 6% of the first mortgage amount. Because the first-time home buyer credit funds are not available before a home purchase, the second mortgage will help pay for down payment and closing costs the buyer likely would have paid for with the credit.

After closing, qualified buyers will file an amended 2008 tax return to receive the tax credit. For buyers who put the full tax credit amount toward their second mortgage (up to six months after closing), Utah Housing Corporation will credit $100 to the second mortgage. For many borrowers, the tax credit will provide near-instant equity by substantially lowering or even eliminating the second mortgage balance.

To learn more about the program and eligibility requirements, visit www.UtahHousingCorp.org or talk to a UHC participating lender.”

It is always a good idea to talk to your accountant or CPA.

According to the Utah Association, “The Home Run program that provided grants to buyers of newly constructed, never-occupied homes has been reinstated, Governor Gary Herbert announced on Friday. The reinstated program will provide $4,000 grants to approximately 1,950 buyers. The grants will be awarded on a first-come, first-served basis to buyers who apply for the funds through their Utah Housing Corporation-approved lender by Nov. 30.

Unlike the original program that was only available for homes that were ready for occupancy upon closing, Home Run 2 allows buyers to receive grants for homes that will be constructed, are currently under construction or are move-in-ready but have never been occupied.

Buyers can apply for the funds through a Utah Housing Corporation-approved lender. Once the application is complete, Utah Housing will issue a grant commitment. For purchases of move-in ready homes, the commitment will expire after 10 days. For homes under construction, the commitment will be in effect until June 30, 2010, giving the builder plenty of time to complete the home.

Although the program is not limited to first-time home buyers, there are income restrictions. For singles, incomes cannot exceed $75,000, and married couples cannot have incomes greater than $150,000. For more information about the program and to find a UHC-approved lender, visit www.UtahHousingCorp.org and look for the Home Run 2 link.

USA TODAY reporter Stephanie Armour states in her article, Home Sellers Are Frustrated As Short Sale Deals Collapse, that, “Scores of homeowners who thought they’d cut a deal with their banks to sell their houses for less than their unpaid mortgages are seeing those agreements fall apart months later, contributing to the mounting foreclosures that threaten the housing market’s recovery.  Just 23 % of short-sale offers that homeowners receive from potential buyers actually close, according to a February study of 1,300 real estate agents by Campbell Communications.  More than 90% of the agents cited a slow response from the lender as the reason short sales were lost.”

As short sales go bust, foreclosures continue to mount and and contribute to the housing crisis.  Someone please remind me where the bail out money went?!

Mortgage rates for a 30 yr fixed are hovering around  5% for FHA.  The number of homes listed and sold remain steady in Weber County since last August, new listings outpacing the number of sales. Homes were on the market for 40 to 95 days in June of this year in Weber County.  The average sales price for a 4 bedroom home in June was around $190,000 and the average sales price for a 2 bedroom home rose from a low of $90,000 in May, 2009, to $130,000 in June, 2009.

According to an update by the National Association of Realtors, the latest quarterly median home price for our market is $216,500, a 7.6% decrease in price from the previous quarter.  However, pending home sales have increased 3.2% from June to July and 12% from July, 2008.

NAR chief economist, Lawrence Yun, stated that, “Housing affordability has been at record highs this year with the added stimulus of a first-time home buyer tax credit.  Other buyers are taking advantage of low home values before prices turn higher.  Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy  a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970.  As long as home buyers stay within their budget mortgage payments will be very manageable.”

Locally, market statistics from the Wasatch Front Multiple Listing Service for that last 90 days in Weber County report total active listings of 1,026 with a median price of $179,900 and an average price of $225,336.  A total of 683 single-family homes were sold with a median price of $162,000 and an average price of $183,070 and were on the market for an average of 83 days.  There were 107 homes that sold between $120-$14,0000 and 106 homes that sold between $160,000 and $180,000.  Sales in the $200,000 to $3000 numbered 140.

So what do these stats mean to you and I?  I believe that now is an excellent time for the single-family home buyer.  The prices in terms of affordability coupled with interest rates, make this a perfect buying climate.

Along the Wasatch Front there has been a surge in home sales over the last several months.  The Salt Board of Realtors released new statistics that there were 5,428 single-family homes sold in the second quarter in Salt Lake, Davis, Utah, Weber and Tooele Counties.  That’s only down about 2% from the same time last year, and in Utah County, home sales were up nearly 15%.  It is probable that people are buying now because they are motivated by affordable prices, low interest rates  and government incentives.  First time home buyers are taking advantage of this real estate climate.  I just submitted a short sale package for first time home buyers and received bank approval in three days!  Short sale transactions seem to be moving along more efficiently.