$8000 Tax Credit for First Time Home Buyers Included in Economic Stimulus

As a part of the stimulus package recently signed into law, there is a tax credit of up to $8000 for first time home buyers. Here are some of the preliminary details;

• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.

• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.

• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.

• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.

• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.

• The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 31, 2009.• The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.

• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.

• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.

• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly. The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund. By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment.

Source: © 2009 FLORIDA ASSOCIATION OF REALTORS®

Have Sales Bottomed out....Now is a great time to be purchasing a home!!

ORLANDO, Fla. – Jan. 26, 2009 – Florida’s existing home sales rose in December, making it the fourth consecutive month that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). December’s statewide sales also increased over November’s figures in both the existing home and existing condo markets.Existing home sales rose 27 percent last month with a total of 11,053 homes sold statewide compared to 8,712 homes sold in December 2007, according to FAR. December’s statewide existing home sales were 28.9 percent higher than November’s statewide sales.Florida Realtors also reported a 12 percent gain in statewide sales of existing condominiums in December, marking the third recent month (following September and October) for higher statewide existing home and existing condo sales compared to year-ago levels. Statewide existing condo sales last month increased 37.7 percent over the total units sold in November.Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in December; 11 MSAs also showed gains in condo sales, marking the sixth month in a row that a number of markets have reported increased sales activity.Florida’s median sales price for existing homes last month was $155,500; a year ago, it was $213,600 for a 27 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in November 2008 was $180,800, down 12.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $285,680 in November; in Massachusetts, it was $283,000; in Maryland, it was $262,109; and in New York, it was $210,000.While overall sales have softened nationally in recent months, NAR’s latest housing outlook noted a trend of increasing activity in Florida, California, Arizona and Nevada markets. “Sales are rising in areas with large numbers of distressed properties as bargain hunters take advantage of discounted home prices,” said NAR Chief Economist Lawrence Yun. “It is imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit.”In Florida’s year-to-year comparison for condos, 3,138 units sold statewide compared to 2,814 sold in December 2007 for a 12 percent increase. The statewide existing condo median sales price last month was $130,600; in December 2007 it was $192,600 for a 32 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $185,400 in November 2008.Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.29 percent, significantly lower than the average rate of 6.10 percent in December 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written. Among the state’s large to medium-size markets, the West Palm Beach-Boca Raton MSA reported a total of 638 homes sold in December compared to 467 homes a year ago for a 37 percent increase. The existing home median sales price was $246,000; a year ago, it was $337,900 for a 27 percent decrease. In the year-to-year comparison for the existing condo market, a total of 527 units sold in the MSA last month, up 26 percent compared to 419 condos sold the previous December. The market’s existing condo median price was $112,900; a year ago, it was $161,400 for a 30 percent decrease.

Spring is on the Way!

It's fast becoming my favotire time of year. It won't be long til the trees start budding out, and flowers begin to bloom. The sign of new life is exciting to me! We've all had a rough winter (even in Florida!). Time for Global Warming to kick in!

I hope you take time to kick back and just enjoy the newness of life soon to come!

This is a shot of some of the flowers in Brenda's Garden.