Home buyer tax credit is expiring

By josephine on Apr. 29, 2010.

The Miami Herald

3/19/10

Home buyer tax credit window closes on April 30

If you’re hoping to buy a home this year but have been on the fence about making your move, don’t forget that your window of opportunity to qualify for a potential tax credit is steadily closing.

First time and repeat buyers meeting the specified the requirements and to receive up to $8,000 and $6,500, respectively, in federal tax credits. The catch is that the homes must be purchased on or before April 30, 2010. In special circumstances, the credits are still available as long as first time or repeat buyers enter into a binding sales contract signed by April 30, 2010 with the purchase transaction completed by June 30, 2010.

The National Association of Home Builders have created a great  federal housing tax credit site with helpful information, tips and FAQs detailing the opportunities and conditions available to you through the Worker, Home ownership, and Business Assistance Act of 2009. For your convenience, we’ve provided some fast facts below, but we encourage you to check out additional resources or discuss these opportunities more closely with your agent or broker.
Fast Facts: First Time Buyer Tax Credit

• A first time buyer is defined as any buyer who has not owned a principal residence during the three-year period preceding the initial home purchase. For married taxpayers to qualify, this (non-)home ownership stipulation must hold true for both the buyer and his/her spouse.

• A first time buyer meeting the qualification and time limitation requirements is eligible to claim the federal tax credit for any principal home purchase, including new or resale, provided that the purchase price does not exceed $800,000.

• The first time buyer tax credit is equal to 10 percent of the home’s purchase price, up to a maximum of $8,000.

• The qualifying income limits are $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. Partial tax credits apply for buyers with a modified adjusted gross income (MAGI) as defined by the IRS.

• Qualifying first time buyers can claim the tax credit on their federal income tax return, allowing for a dollar-for-dollar reduction in what they owe in taxes.

Fast Facts: Repeat Buyer Tax Credit

• A repeat buyer is defined as a long time resident who has owned and lived in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers to qualify, both the buyer and his/her spouse must meet the required five years of principal residency stipulation.

• A repeat buyer meeting the qualification and time limitation requirements is eligible to claim the federal tax credit for any principal home purchase, including new or resale, provided that the purchase price does not exceed $800,000.

• The repeat buyer tax credit is equal to 10 percent of the home’s purchase price, up to a maximum of $6,500. The qualifying income limits are identical to the first time buyer tax credit requirements (including additional conditions for taxpayers with MAGI).

• Qualifying repeat buyers can claim the tax credit on their federal income tax return, allowing for a dollar-for-dollar reduction in what they owe in taxes.

Survey: Florida real estate has hit bottom

By josephine on Apr. 29, 2010.

Miami Herald

4/29/10

The real estate market in Florida probably has probably reached its lowest point, according to a survey of professionals across the state.

Commercial real estate perks up!!! Good News!

By josephine on Apr. 23, 2010.

NEW YORK – April 20, 2010 – The darkest cloud over the economic recovery – the troubled commercial real estate market – may be clearing a bit.

Prices of commercial property are up slightly compared with last fall. Loan modifications have risen sharply the past six months. Commercial mortgage-backed securities (CMBS), a big funding source that was comatose for two years, has come to life recently.

The developments won’t alleviate the sector’s biggest problem: the rising pace of defaults. But they should contain the damage and provide a lifeline to better-performing properties, analysts say.

Developers put up too many commercial buildings earlier this decade and paid the price when the economy wilted as vacancies rose and rents fell. Default rates jumped to 3.8 percent from 1.6 percent in 2009 and will hit 5.1 percent this year, Real Capital Analytics says.

Many larger deals were financed by CMBS. Investment banks bundled loans for several projects into securities they sold to investors. A record $230 billion in securities were issued in 2007 vs. $3 billion last year, Commercial Mortgage Alert says. Already this year, $4 billion in deals have been done. Tom Fink of research firm Trepp predicts about $25 billion in CMBS will be issued in 2010.

Investors and banks have waded back into the market because property values have bottomed and lending standards have toughened, says David Nackoul of mortgage broker Holliday Fenoglio Fowler. And with bond interest rates at low levels, investors are seeking higher yields.

The money isn’t rescuing distressed properties. It’s refinancing high-quality loans as they mature. Even borrowers who bought projects before the real estate bubble have had a hard time refinancing because of scarce funding and lenders demanding higher downpayments.

Michael Glimcher, CEO of Glimcher Realty Trust, recently snared $100 million in loans that will be sold into the CMBS market. He’ll use the money to refinance loans for shopping centers in Tennessee and Ohio after struggling to refinance malls last year.

“The pipeline has opened back up,” he says.

The funds’ availability also could help some borrowers whose properties have fallen in value since they bought them but who are still making payments, Fink says. Deutsche Bank analyst Richard Parkus says most of the $1.4 trillion in mortgages maturing by 2013 won’t qualify for refinancing unless borrowers put up more cash.

That could lead to foreclosures, further depressing prices, though many lenders have extended loans on the hope prices will rebound. The new capital “will moderate (the slump),” Fink says.

Other good signs:

• Commercial real estate values have edged up 6 percent in recent months, Real Capital Analytics says. They fell 45 percent from 2007 to 2009.

• About $13.7 billion in loans were modified the past six months, Parkus says.