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Senate votes to extend June 30 deadline

filed under: $6500 tax credit, $8000 tax credit, Buyers, First-time buyers, Tax credits posted on June 17th, 2010

MORE TIME TO CLOSE: The Senate voted to extend the June 30 deadline to close on a home purchase and qualify for a tax credit until Sept. 20.

MORE TIME TO CLOSE: The Senate has voted to extend the June 30 deadline to close on a home purchase -- and qualify for a $6,500 or $8,000 tax credit -- until Sept. 30.

The Senate has approved a proposal that would give home buyers trying to claim the $8,000 tax  credit an extra three months to close on their purchases, provided they have already met the April 30 deadline to get their home under contract.

Basically this would help clear the huge backlog of people who are all desperately trying to close their deals by June 30 in order to qualify for the tax credit, as the law now requires. Real estate deals often don’t close on time — they can be delayed by problems with the appraisal, lengthy turn-around times in lender underwriting or other wrinkles in the loan process — and right now many lenders are backed up with a swell of loans that all need to close in the next two weeks. I have one Chicago buyer who has been practically doing back-flips to get his loan approved in time, but when we asked the lender yesterday whether it would close by June 30, she said bluntly, “I have no idea.”

To take the pressure off, the Senate voted 60-37 yesterday to extend the closing deadline to Sept. 30, 2010. The extension would also apply to “move-up” buyers trying to claim a $6,500 tax credit for purchasing a home they intend to live in.

The new deadline would help an estimated 180,000 home buyers now racing the clock to close on time, several thousand of whom undoubtedly live in the Chicago area.

But the extension, if approved by Congress and the president, will only apply to people already in the home-buying pipeline. To qualify for the tax credit, you must have already signed the contract to buy your home on or before April 30.

Written by Sue Fox // Please leave a comment.

Tax credit countdown: Chicago home buyers have only 2 months left

filed under: $6500 tax credit, $8000 tax credit, Buyers, First-time buyers, Mortgage Rates, Tax credits posted on February 22nd, 2010

Chicago home buyers, time is running out to claim your $8,000 tax credit!

TIME IS RUNNING OUT: First-time home buyers must have a property under contract by April 30 to enjoy their $8,000 in free government money.

Congress has already extended and expanded the $8,000 first-time home buyer’s tax credit once, and it’s unclear that lawmakers have the appetite to do so again. So if you are still considering buying a home, you now have about two months left to scoop up thousands of free dollars.

This is a great deal for buyers, but many of them aren’t quite ready to act. Here’s why they should:

1) First-time buyers (who earn up to $125,000 as a single person or $225,000 as a couple) can get $8,000 back on their taxes. This is free money, one of the primary ways the government is helping regular people rather than banks and other corporations. Buyers who have already owned homes can now qualify for a $6,500 tax credit if they purchase a home they intend to occupy.

2) Interest rates are phenomenally low right now. I just had a buyer lock in a rate of 4.83% on a 30-year loan! But we will not see rates of 5% and below for much longer, because the government has already announced its intention to stop buying the mortgage-backed securities that are keeping rates artificially low. Many experts predict mortgage rates will rise half a point to a full point this year, beginning at the end of March.

3) There are tons of real estate bargains out there right now. More foreclosures are hitting the market, holding down prices across the board, and even new condo developments in trendy neighborhoods like River North, Gold Coast, Streeterville, West Loop and the South Loop have seen dramatic price reductions in an effort to attract buyers.

Remember, to qualify for the tax credit you must sign a contract to buy the home by April 30 and close by June 30.

Written by Sue Fox // Please leave a comment.

Super Bowl Sunday kicks off Chicago home-buying season

filed under: $6500 tax credit, $8000 tax credit, Buyers, First-time buyers, Tax credits posted on February 7th, 2010

Looking for a Chicago home? The spring season officially kicks off today!

GAME TIME: Along with the big game, Super Bowl Sunday traditionally kicks off Chicago's spring home-buying season.

Before I head out to a friend’s house for a combo Super Bowl Party/Baby Shower (don’t ask), I just wanted to say… Go Saints!

Actually, I wanted to say that Super Bowl Sunday kicks off our spring season in the land of Chicago home buying. This year, buyers have already been out and about for a solid month — I had six showings today, for two different sets of clients — because many of them hope to take advantage of the $8,000 first-time buyer’s tax credit.

Expect a busy spring for well-priced properties, because the credit is soon to expire. Buyers must have a property under contract by April 30 in order to qualify. This deadline also applies to move-up buyers who qualify for the $6,500 credit for those buying another home.

And you must close by June 30. That said, enjoy the game!

Written by Sue Fox // 1 Comment »

Happy New Year: A shaky recovery will benefit buyers

filed under: $6500 tax credit, $8000 tax credit, Buyers, Chicago home prices, Foreclosures, Market conditions posted on January 2nd, 2010

A NEW YEAR: But old problems persist. Housing prices may fall anew in Chicago, making it a bright year for buyers with good credit and income.

I woke up today to 6-degree weather and a front-page, above-the-fold, New York Times story warning that the government’s Making Home Affordable program is not, in fact, making homes affordable and is actually prolonging the foreclosure crisis. Welcome to 2010!

Despite pressuring and cajoling lenders for almost a year, the government has not managed to find a permanent fix for millions of floundering homeowners. More than 2 million homes were lost to foreclosures or short sales in 2009, the Times reported, and at least 2.4 million more are expected this year.

Chicago is hardly immune. While we may have escaped the exaggerated boom and bust cycles that wracked many coastal states like California and Florida, Illinois is right up there in the nation’s Top 10 list for foreclosures. Our foreclosure rate doubled over the past year.

I know that sometimes there’s a disconnect between what buyers are reading in the newspapers and seeing on the streets. Buyers in some of Chicago’s most popular neighborhoods like Lincoln Park, Lakeview, Bucktown and River North may not see many foreclosures for sale, but the overall trend still benefits them. If dozens of foreclosures and short sales are roiling the market and driving down prices in Albany Park, for example, that holds down home values in nearby Lincoln Square. Prices citywide could easily slip again in 2010, because the increasing supply will clamp the lid on any recovery. The Illinois Association of Realtors is forecasting a 4.4% price decline throughout the Chicago area.

Is it finally time to buy? I see a short window from now until April, when many buyers can still claim either the $6,500 or $8,000 tax credit, and while interest rates are still hovering around the 5% mark. Borrowing money is extraordinarily cheap right now, but that won’t always be the case. Interest rates are expected to rise this spring, as the government stops propping up the market by buying mortgage-backed securities.

Written by Sue Fox // 1 Comment »

Chicago and Case-Shiller: Home values dip slightly in October

filed under: $6500 tax credit, $8000 tax credit, Buyers, Chicago home prices, First-time buyers posted on December 29th, 2009

It’s the end of the month, time for the Standard & Poor’s/Case-Schiller Home Value Index to tell us how prices are faring in 20 major cities. In a word, the answer is: flat.

But flat is okay; flat means prices have stopped plunging. In Chicago, after five months of steady but small increases, prices fell 1% in October over the previous month.

If you look at the entire third quarter, local home prices actually rose slightly — 1.9 % — between July and October 2009. For Chicago condos alone, the price increased 1.1% during the late summer/early autumn months.

Month over month, Chicago is pretty much standing still, according to Case-Shiller. Up a point here, down a point there, indicating that our market seems to have found some equilibrium, at least for now.

So, savvy home buyers, have we hit a bottom? Perhaps. Chicago homes are still 10% cheaper now than they were a year ago, according to Case-Shiller’s figures, so early 2010 may be the sweet spot. Especially if you qualify for the $6,500 or $8,000 tax credit for home buyers. Interest rates are also quite low right now. I’ve been selling real estate in Chicago for five years, and I’ve never seen the stars align quite so well for buyers.

Written by Sue Fox // 2 Comments »

A buyer's feast: Chicago home sales skyrocket 70% in November

filed under: $6500 tax credit, $8000 tax credit, Buyers, Chicago home sales, First-time buyers, Market conditions posted on December 23rd, 2009

HAPPY HOLIDAYS: Home sales have surged dramatically in Chicago, helping to push prices up as well.

Yow. Chicago has just witnessed a full-on stampede of buyers, all racing to close on their new homes. November sales numbers were off the charts, with buyers snapping up 1,859 homes in the city, compared to just 1,094 last November, according to the Illinois Association of Realtors. That’s a 70% jump in a single year!

I am impressed. This just shows how many smart buyers there are, and I bet the majority of them were first-time buyers taking advantage of their free $8,000 from the federal tax credit (which was set to expire Nov. 30.) Interest rates were also super-low this fall, and home prices were quite reasonable as well.

The November numbers look more like what we generally see in the busy summer months. Even better, this horde of buyers seems to have built a floor under prices as well.

Check out this new stat: The median home price in Chicago is now $215,000, down 3.4% from November 2008. On the face of it, that’s not so great; prices have slipped a bit since last fall. But when you consider that ALL YEAR we’ve been looking at year-over-year citywide price drops of 10-18%, a 3.4% decline looks rather rosy!

In other words, home prices are recovering. They may not be what they were three years ago, but they have stopped declining each month and now they are starting to tick back up. It’s not too late for buyers to catch this wave, either. The $8,000 tax credit has been extended, so you have until April 30 to qualify. And if you’re already a homeowner who has lived in your home for at least five years, you could qualify for $6,500 if you buy a new place.

Written by Sue Fox // Please leave a comment.

Sellers: Get ready for a jumping January! Five reasons Chicago homes will be moving fast

filed under: $6500 tax credit, $8000 tax credit, Chicago home sales, First-time buyers, Market conditions, Sellers posted on December 8th, 2009

If you are planning to sell your home in 2010, the best time to start will probably be the moment you ring in the New Year! That only gives you three weeks to prepare, I know, but there are at least five great reasons to get your condo or house all spruced up and ready to hit the market in January.

1) The Home Buyers Tax Credit: Now it’s not just the first-time buyers who can benefit from the government’s free cash. Homeowners who are trading up (or down) to another home are also eligible for thousands of dollars. With first-timers standing to make $8,000 and move-up buyers in line for $6,500 apiece, that’s an awful lot of buyers who must sign a purchase contract by April 30, 2010, in order to qualify for the tax credit. That means that January, February and March will be bustling as buyers brave the snow to hunt for their future home. As a seller, you need to put your best foot forward with a polished, well-priced home that will capture their attention.

2) Incredibly Low Interest Rates: Borrowing is very cheap right now, with mortgage interest rates hovering at record lows. According to interest.com, the average rate for a 30-year, fixed-rate mortgage — the most popular way to finance a home — was just 5.01% in the latest weekly survey of major lenders. It’s a great time to lock in an interest rate, and savvy buyers will be taking advantage of this easy money while they can.

3) Home Prices Are Bottoming Out: For the last five months, home prices in Chicago have stopped sinking and actually started climbing. They’ve only gone up a percentage point or so each month, but the overall trend is unmistakable: Prices are rising. We seem to have hit bottom. For the long-term buyer, who plans to hold onto his/her property for years to come, this is a giant green light.

4) Home Sales Are Skyrocketing: The proof of the pudding is in the tasting, and thousands of buyers are already gobbling up Chicago real estate. Buyers surged into the market this fall — sales were up 28.5% throughout the city of Chicago in October — and now others who were sitting on the sidelines feel reassured. Rising sales help put a floor under prices, allowing the market to stabilize and attracting more buyers who realize that this potent mix of low prices, low interest rates and a fat government tax credit will not last long.

5) Unemployment Is Falling: Real estate is sensitive to changes in the job market, and this month we’ve seen some signs that better days are ahead. Nationally, the unemployment rate fell in November from 10.2%  to 10%. The drop surprised analysts, leading many to surmise that the downturn had ended. The economy certainly seems to be back on the rails after a very tough year, and housing will only benefit as the job picture brightens.

SO IF YOU ARE THINKING ABOUT SELLING YOUR HOME NEXT YEAR, please call me now! It’s time to clear out the clutter, make any necessary repairs, analyze your neighborhood’s prices and sign the paperwork, so that your home is absolutely ready to hit the market in January.

Written by Sue Fox // 1 Comment »

How to claim your $8,000 tax credit

filed under: $6500 tax credit, $8000 tax credit, First-time buyers, Market conditions posted on December 7th, 2009

For all you first-time buyers out there who closed on a home this year, that $8,000 the government promised you is on its way…almost. The Internal Revenue Service just released guidelines for claiming the tax credit, and its advice is to wait for a couple weeks.

FREE MONEY: Finally, a piece of the stimulus package for the regular folks! If you bought a home this year, you may qualify for either $8,000 or $6,500 from the government.

That’s because the government is about to publish a revised Form 5405 with all the instructions for claiming your money. It will include all the changes made Nov. 6 when President Barack Obama signed into law an expanded program, which now provides a $6,500 credit to “move-up” buyers, people who sell their home and buy another one.

Other changes include expanding the income limits to $125,000/year for single people and $225,000/year for married couples. (Unfortunately, if you closed before Nov. 6, the old income limits still apply. So if you made more than $75,000 as a single person or $150,000 as a couple, you’re out of luck.)

Anyone who buys their home after Nov. 6 must use the new form to claim the credit, according to the IRS.  So if you have recently closed on your purchase, try to be patient for a few weeks before filing your claim.

Written by Sue Fox // Please leave a comment.