Sue Fox, @Properties. Direct 773.816.1788
Subscribe to Site
- FHA loans
- Market conditions
- Tax credits
Real Estate radio
Archive for the 'Tax credits' Category
For once, the city of Chicago is not raising taxes but rather tossing some cash back to taxpayers. If you own a home in Chicago, the city’s Property Tax Relief Program may send you a check for up to $200 if you qualify. But you have to apply.
To be eligible, you must live in your home and your property tax bill (the Second Installment 2008 bill that you received in October 2009) must indicate a homeowner exemption. You also must earn less than $200,000 annually.
The city says it is distributing relief checks on a first-come, first-served basis, and the amounts vary from $25 to $200 based upon your income and the amount that your taxes increased last year.
Applications are available online at www.cityofchicago.org. You can also visit the city’s Revenue Sites at 2550 W. Addison, 4770 South Kedzie, or 2006 East 95th Street, which are open Mon-Fri. from 8 am to 6:30 pm, or 400 W. Superior, which is open Mon-Fri. from 8 am to 4:30 pm and Sat. from 8 am to 3:30 pm. Good luck!
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.
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.
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.
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.
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.
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.
Buyers know a good deal when they see one. In October, they barreled into the housing market, driving up sales in Chicago by 28.5% over last year, according to a report today from the Illinois Association of Realtors.
It seems that the government’s $8,000 tax credit for first-time buyers — along with relatively low interest rates — is working. In the city of Chicago, there were 2,012 sales of single-family houses and condos in October, compared to just 1,566 homes sold in October 2008. This is good news for sellers, because it means our bloated inventory of homes is actually beginning to shrink as buyers snap up deals.
“October’s extraordinary sales totals reflect home purchases by many buyers who were sitting on the sidelines of the housing market, waiting out the economic downturn, as well as more home sellers coming to terms with accurate pricing given the market conditions,” said Mike Onorato, president of the Illinois Association of Realtors.
But even though more properties are changing hands, prices have not recovered. The median home price in Chicago fell 18% since last October, from $262,250 to $215,000.
For sellers, it is critically important to acknowledge the shifting terrain and price your home accordingly. There is no room in this market for an overpriced property you’re trying to sell for what your neighbor got last summer. Don’t even bother. Buyers are smart, and as today’s report shows, they are out there in droves, willing to buy when they find a good deal.
The federal home buyer’s credit has now been extended (and expanded to other buyers) for the next five months. Don’t waste this chance to sell by sticking last year’s price tag on your home!
It’s official: The $8,000 tax credit for first-time home buyers has been extended for five more months. This is great news for anyone hoping to buy or sell a home soon, particularly in sluggish markets like Chicago!
On Friday, President Barack Obama signed a $24-billion stimulus bill that — among other things — extends the tax credit for first-time buyers until April 30, 2010. Buyers must sign a contract on a home by then, and close the deal by the end of June, to qualify. The new measure also provides a $6,500 credit for those who have lived in their current home for at least five years and are selling it to buy another home.
The income limits for the new program are also significantly higher, which will allow more people to take advantage of the government money. To qualify, a single person can earn up to $125,000 annually (or $225,000 for a couple). The law also extends unemployment benefits and provides and tax credits for some businesses.
The Senate approved the measure Wednesday and the House followed suit the next day. Compared to the contentious health care debate, this bill sailed through: The Senate vote was unanimous while the House voted 403 to 12 in favor.
There have been a lot of rumors and news reports flying around in the last couple days, suggesting that the government — yippee! — has decided to extend the $8,000 tax credit for first-time home buyers. However, it seems some people have forgotten the little jingle that explains how a bill becomes a law (“I’m just a bill… sitting here on Capitol Hill” see the video here, for old time’s sake.)
So far, only a group of Senate negotiators has agreed to extend, and slightly expand, the $8,000 tax credit. The program would give buyers until April 30, 2010 to sign a contract to purchase a home, and another 60 days to close. It would also allow other buyers who have lived in their home for at least 5 years to qualify for a $6,500 tax credit if they sell it and buy another home. Income limits for the program would increase, and the credit would only apply to homes that cost less than $800,000.
But remember, the bill still needs to be approved by the full Senate and the House. President Barack Obama has already indicated his support for the extension, which many housing analysts believe has helped stabilize the market. Some 400,000 home sales this year were spurred by the current credit, economists say, which is set to expire on Nov. 30.
“It is imperative that we retain the momentum we have gained as a result of the current credit,” said Sen. Johnny Isakson (R-Ga.), a former realtor who co-sponsored the measure, “and go into the spring market with the increased consumer confidence necessary for establishing a viable market.” Go, Johnny, go!
If approved, the tax credit extension would be seamless, with buyers noticing no disruption as November passes into December. For now, we are definitely getting closer, but it’s not a done deal yet!
Could it be? It looks like efforts to extend the $8,000 credit for first-time homebuyers are now moving to the top echelons of the government.
This week, President Barack Obama met with House Speaker Nancy Pelosi and Senator Harry Reid, the Senate majority leader, to discuss ways to improve our hobbled economy and create more jobs. Extending the housing credit — possibly until May — is one of the options on the table. Reid (who is up for re-election in Nevada, a state walloped by the housing downturn) especially favors the measure, according to the New York Times.
Economists estimate that the $8,000 credit spurred almost 400,000 sales this year nationwide, out of 1.4 million total sales. Some say that if the credit expires as scheduled on Nov. 30, house prices could begin to fall again, potentially pushing the fragile economy back into a recession.
- Sizzle is back in the South Loop
- How to Buy a Chicago Foreclosure (as Supply Steadily Shrinks)
- Home prices jump 15% in 2014, but cold weather chills sales
- Lincoln Square on a Tear as Average House Price Tops $600,000
- More choices ahead for Chicago buyers as rally cools