Tag >> Home Buying
As the economic boost from the federal tax credit for new homebuyers fades, Austin area home sales continued to increase in May, rising 24 percent compared with the same month in 2009, according to the Austin Board of Realtors.
While the median price in Austin last month decreased 2 percent compared with May 2009 to $192,000, the price was still up from the figure in April 2010 at $190,700.
Home sales for the month totaled $508 million with 2,074 single-family homes sold, according to the Multiple Listing Service report.
"Although the tax credit expired in April, we are still seeing its impact on sales in May," said John Horton, Austin Board of Realtors chairman. "Single-family sales continued to exceed last year's numbers due to home contracts written before the April deadline, which continued to close in May."
In May, the days on the market for single-family homes decreased 20 percent to 63 days as compared with the same month in 2009. Pending sales decreased 34 percent last month to 1,405, when compared to May last year.
"The rush of buyers to beat the homebuyer tax credit in April led to a decrease of buyers in the market in May, resulting in decreased pending sales," Horton said. However, the market in Austin continues to maintain a balanced supply of housing inventory, which is currently at 6.7 months. Sustaining a healthy supply of inventory should help prices continue to remain stable in the coming months."
Sales in May of condos and townhouses seemed to mirror single-family homes with sales increasing 28 percent to 226 sales and pending sales decreasing 28 percent to 167.
Housing sales figures in Austin have been up most of this year, but Horton predicts a summer slowdown as people that wanted the tax credit already rushed to buy their homes, and others on the fence are now taking their time as they missed the deadline.
Though, the U.S. Senate passed a bill Thursday that could extend the closing deadline to Sept. 30.
"Due to many buyers moving their decision to purchase up to beat the tax credit deadline, we could see a slight decrease in sales in coming months," Horton said. "Despite the potential slow down in sales, we will continue to see April contracts close during this time. It is natural to have a pause in the market before new buyers enter for the summer buying season, and we expect the market to even out by the end of the summer." One potential bright spot that Realtors have in the Texas market though is the new Bond 77 program. Launched last month by the Texas Department of Housing and Community Affairs as part of the state's ongoing first-time homebuyer program, the department is making $500 million available to eligible homebuyers for mortgage loan assistance - either through down payment assistance or by facilitating a lower interest rate. "It's the single-largest financing initiative for state homebuyer funds in the 27-year history of the program and serves as the state's response to the recent expiration of the federal homebuyer tax credit," said Gordon Anderson, a spokesman for the Department of Housing and Community Affairs. The state is now making available the first $50 million of the $500 million, which state officials said will be distributed on a first-come-first-served basis. It's anticipated that it will take 18 months to expend the program's total amount.
Read more: Austin homes sales up 24 percent in May - Austin Business Journal
Central Texas home sales skyrocketed nearly 31 percent in April and pending sales were up almost 47 percent from a year ago, as buyers rushed to beat the April 30 deadline for a federal income-tax credit, the Austin Board of Realtors said today. “Although the tax credit has expired, we are entering a growing economic, real estate and seasonal cycle which we hope will continue to provide momentum to carry our market upward,” said board Chairman John Horton. The tax credit was $8,000 for first-time buyers and $6,500 for repeat buyers. For purchases where a binding contract was signed by the end of April, qualified buyers have until June 30 to complete the sale. The board reported that real estate agents sold 2,043 homes in April compared with 1,561 in April 2009. The median sale price was unchanged at $190,700. From January through April, sales are up 17 percent, the board said. The amount of time homes were on the market fell 13 percent, to an average of 69 days vs. 79 a year ago. The number of homes on the market in April — 10,749 active listings — amounted to a 6.5 month’s supply, which represents a balanced market, the board said. Sales of condominiums and townhouses also were strong in April, with the 213 sales amounting to a 63 percent increase from a year ago. Pending sales for condos and townhouses rose 70 percent. “The significant increase seen in the condo and townhouse market can most likely be attributed to the first-time homebuyer tax credit,” Horton said. “The median price for condos and townhouses is approximately $30,000 less than the median price for a single-family home; and therefore, these properties can be a more affordable alternative for first-time buyers.” Horton said that although the tax credits have made it more attractive for some buyers to purchase now, “there are a lot of buyers who have been waiting to purchase until they were confident in the economy. Now that we are seeing recovery in the economy and real estate market, in combination with historically low interest rates, those potential buyers who have been on the fence are now taking the leap and entering the housing market.”
Softer condo market may have spurred buyers to take advantage, real estate board saysHome sales in Central Texas surged 27 percent in March compared with the same month last year, pumped up by buyers seeking to take advantage of a federal homebuyer tax credit that expires April 30, the Austin Board of Realtors reported Tuesday. Real estate agents sold 1,784 existing homes in March, compared with 1,404 a year ago. The median price remained stable, at $180,000, the board said. "Though we've seen increases in year-over-year sales volume consistently in recent months, it's likely this substantial increase in volume is related to the impending expiration of the homebuyer tax credits on April 30," said John Horton, chairman of the Austin Board of Realtors. "What's most encouraging, however, is that in the midst of this increase in sales volume, our real estate values have remained steady, which bodes well for the long-term value of real estate in Austin." The tax credit - $8,000 for first-time buyers and $6,500 for repeat buyers - has been credited with spurring tens of thousands of sales across the country in recent months. Some housing experts have expressed concern that sales could slow when the credit ends. Homes must be under contract by April 30, with the closing done by June 30, in order to qualify. For the first three months of the year, 70 percent of Austin-area sales have been for homes priced at $249,999 or less, where first-time buyers would focus. Other Texas cities also have seen increases linked to the tax credit. Sales were up 28 percent last month in the San Antonio area but only 11 percent in Dallas and Houston. From January through March, home sales in Central Texas were up 12 percent. Sales of condos and townhouses were particularly strong in March 2010, with the 215 sales representing a 129 percent jump compared with March 2009. The surge follows sustained increases in demand for condos and townhomes since September 2009, and a year-to-date increase of 86 percent. "A softer condo market at the beginning of 2010 provided a good opportunity for buyers, and we are now seeing the results with an increase in activity," Horton said. "Condos can be attractive properties for first-time homebuyers, so it's possible this increased demand is also related to both the first-time homebuyer tax credit as well as an increased supply of condos in Austin in recent years." Horton said March 2010 also marked the second consecutive month that homes had sold faster than during the year-ago period. In March, homes were on the market an average of 73 days, down from 88 in March 2009. During that same time, pending sales increased 31 percent to 2,421; new listings were up by 29 percent to 4,170; and active listings rose by six percent to 10,300. "These statistics indicate that demand is continuing to outpace supply, which is encouraging," Horton said. "However, no one really knows the full impact of the homebuyer tax credits yet, so we'll look ahead to this summer to determine the sustainability of these conditions." By Shonda Novak, statesman.com
by Shonda Novak Central Texas home sales rose 5 percent in January from a year ago, the Austin Board of Realtors reported Thursday. January's median sales price rose 1 percent to $179,250. Real estate agents sold 884 previously owned homes in January, compared with 840 the same month last year. There were 1,417 sales pending, a 7 percent increase from a year earlier. John Horton, chairman of the Board of Realtors, said January 2009 marked the low point of the current cycle. "With steady improvement throughout 2009 that continued in January 2010, we can see that we're one year into the recovery in Austin," Horton said. "What's most important about this is that it's the kind of recovery we want: one that is steady, stable and consistent." Throughout 2009, the volume of single-family home sales in Austin improved steadily, Horton said. In the first half of 2009, the gap in year-over-year sales narrowed consistently, reaching levels similar to those in 2008 during the summer peak, with the exception of a dip in August, Horton said. By fall, sales began outperforming 2008. They surged in October and November, spurred by the original deadline for the first-time homebuyer tax credit. In December, sales returned to a modest increase, rising 5 percent from December 2008, a growth rate that held last month. "We're already seeing positive signs in sales volume and price appreciation," Horton said. "Those factors, combined with the population growth and additional jobs economists expect for our area in 2010, bode well for the long-term value of Austin real estate." from Statesman.com
Realtors' group sees ‘slow, sustainable growth' in sales activity NEW YORK - Better news from the U.S. housing industry sent stocks higher Tuesday, including an increase in the number of people with contracts to buy homes. The National Association of Realtors, a trade group, said its index of sale contracts rose 1 percent in December. It was the ninth improvement over the past 10 months as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November. "It's a slow, sustainable growth," said Daniel Penrod, senior industry analyst for the California Credit Union League. "Most people would prefer a quick rebound but that's not likely to happen." The home sales report was the latest bit of encouraging news on the economy. Stocks rose on Monday after a surprisingly strong reading on the manufacturing sector, and on Friday the government reported that the U.S. economy grew at an annual rate of 5.7 percent in the final three months of 2009, a faster pace than expected. Homebuilder stocks rose sharply after D.R. Horton Inc. posted its first profit since 2007 during its fiscal first quarter. Much of its $192 million profit during the October-December period came from a tax gain, but its revenue rose because of a 36 percent jump in home sales. Orders increased 45 percent. The reports brought a positive tone to the market, which stumbled in late January as concerns arose that the recovery might be stalling and that the market's 10-month advance was running out of gas. The Standard & Poor's 500 index fell 3.7 percent in January, its worst month since hitting a 12-year low nearly a year ago. According to preliminary calculations, the Dow rose 111.32, or 1.09 percent, to 10,296.85. The S&P 500 index rose 14.13, or 1.30 percent, to 1,103.32, while Nasdaq composite index advanced 18.86, or 0.87 percent, to 2,190.06. Bond prices inched higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, dipped to 3.64 percent from 3.66 percent late Monday. Click here for the rest of the article. Story by Associated Press
Sales of existing home sales in Central Texas rose 5 percent in December from the previous December, bringing total sales for 2009 to 19,005, down 6 percent from 2008, the Austin Board of Realtors reported. The median price was up 6 percent in December, to $194,000, but throughout 2009 it slipped 1 percent, to $188,480, the board said. Sales climbed dramatically in October and November as buyers rushed to take advantage of the original Nov. 30 deadline for first-time homebuyer tax credit, which has since been extended and expanded to repeat buyers through April. "However, increases in sales volume beyond November and figures that have improved steadily throughout the year indicate that, while some demand was driven by the tax credit deadline, a sustainable recovery is also underway in the real estate market," said John Horton, the board's chairman. "We're seeing encouraging news from many sources that 2010 will be an improvement over 2009, and I think this report is one more indicator the outlook is beginning to brighten." Homes stayed on the market longer in December, an average of 88 days compared with 85 in December 2008. The number of homes on the market declined, with December's 8,079 listings down 5 percent from the previous December. from Statesman.com
Posted by: gardnergroup in Tax Credit, Home Buying on
Jan 20, 2010
HUD is now allowing "monetization" of the tax credit. What does that mean?
It means that HUD allows buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 or 2010 income taxes to receive a refund. These funds may be used for certain downpayment and closing cost expenses.
Under HUD's guidelines, non-profits and FHA-approved lenders are allowed to give home buyers short-term loans of up to $8,000. The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.
Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent downpayment requirement. In addition, approved FHA lenders can purchase a home buyer's anticipated tax credit to pay closing costs and downpayment costs above the 3.5 percent downpayment that is required for FHA-insured homes.
More information about the guidelines is available on the NAHB web site. Read the HUD mortgagee letter (pdf) and an explanation of the FHA Mortgagee Letter on Tax Credit Monetization (pdf). An FAQ about monetization (pdf) is available at the NAHB web site. You can find more information on the Federal Housing Tax Credit here.
According to a January article from Realty Times, investors are once again gaining confidence in real estate as a solid investment. Low interest rates, low home prices, and a wealth of properties on the market are all contributors to this trend. To read the entire article, click here.
Austin-area home resales jumped 58 percent last month from November 2008 as buyers scrambled to take advantage of low mortgage interest rates and a tax credit for first-time buyers. But local experts don't expect those big percentage gains to continue. Sales could slow next year, they said, anticipating rising mortgage interest rates and the end of the tax credit, which Congress recently extended through April and expanded to additional buyers. November's percentage increase was the biggest in more than a decade and followed a 38 percent jump in October, according to the Austin Board of Realtors. However, the 997 sales in November 2008 were unusually low, reflecting the worsening economic downturn at the time. Last month, 1,576 homes were sold, the board said. The median price was $179,900, down 2 percent from a year ago. "The numbers are certainly welcome news," said David Reed, a senior loan officer with Austin-based Land Mortgage. "Fifty-eight percent is huge, even if you factor in the extra selling days in November compared to last year." With the median price holding relatively steady, "it's even better news still," Reed said. But the market isn't in the clear yet. More challenges are ahead because of "minimal prospects for short term improvement in the local economy and our job market," said Eldon Rude, local director for Metrostudy, a housing research firm. He said he doesn't expect the market to show strong growth "until the employment picture brightens and consumer confidence strengthens." Rude said the sharp increase in November resales "was definitely tied to the availability of the tax credit but was also related to the significant slowdown in sales activity late last year as the U.S. recession took hold." With the extension, first-time buyers may still qualify for up to $8,000, but other buyers can get up to $6,500. Buyers must have a house under contract by the end of April and close on the sale by the end of June. Year-over-year sales were up 31 percent in the Dallas area, also one of the biggest increases on record; 32.8 percent in Houston; and 52 percent in San Antonio. Reed said he thinks the tax credit alone wasn't enough to spur the Austin area's November surge. He said that interest rates of less than 5 percent also were a factor, as was the specter of rising rates. Reed predicted that interest rates will move into the mid- to high 5 percent range by the end of next year's first quarter. Some real estate agents voiced optimism about 2010. "It just seems like the numbers are going steadily up, along with the economy," said Nell Hurtado, an agent with JB Goodwin Realtors. "People have a different attitude. They're more upbeat about the economy." Reed said he still foresees "a positive year for sales growth in 2010 - just nothing like a robust November we just had." From statesman.com snovak@statesman.com; 445-3856
Posted by: gardnergroup in Home Buying on
Dec 23, 2009
A first time home buyer recently asked whether he should consider a duplex over a single family home and what was meant by saying location, location, location. My answer follows: In Austin I believe there are only a few scenarios where a duplex makes sense, and the following are a some examples: - * The buyer needs a tenant to share in the payment to make a monthly payment comfortable when a condominium is not suitable for the buyer's lifestyle.
- * The buyer has parents who need to be near for health reasons, and the family cannot afford separate residences near one another.
- *The buyer picks up a duplex in a predominantly single family area - usually in an older part of town and with single family on both sides of the duplex- and holds on to hold the land as an investment using the dual rents of the duplex to pay for it because the dirt in that area is appreciating at a minimum of 15% annually across period of time. In this example, the owner would eventually be looking for a buyer who wants to convert the duplex to single family at sale or possibly demolish the structure and build a single family home.
The downside to duplexes, at least in Austin, is the appreciation differential when compared with single family. Duplex appreciation is for the most part tied to the rents it can bring, while single family areas will go up based on other considerations that are not constrained by income production potential. I have seen duplexes appreciate at 1%-2% annually from a bust to boom cycle - say a 5 year period - where single family in the same area appreciated at an average of 8%-10%. Even when you take into account the rental income and tax implications of both properties, were you to live in one side of the duplex, the single family comes out ahead as an investment, albeit in some cases only marginally, and was probably a more enjoyable place to live. In that same cycle, keep in mind there would have been single family areas that went up as much as 16%-18%, in which case the single family would FAR outpace the duplex in appreciation. The tough part is finding that area...which brings me to location. The old location, location, location axiom simply means you can always change the house - from a cosmetic remodel to a demolition and re-build - but you can't change where the house is. Location is always paramount in a purchase. This is true when considering one neighborhood over another - you may only be able to afford a fixer upper in what would be considered a great location in a given city, where in an average or poor location in town you can buy a home that has everything you want. For example, a home in a cul-de-sac, backing to greenbelt on a large lot that comes with laminate counter tops, cheap carpet and linoleum flooring but is the same price as a home in the neighborhood that backs to a busy road where noise is a significant issue but that comes remodeled with granite counters, plush carpet and tile flooring at the wet areas may be the more desirable purchase. Brandon Gardner
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