Notes from Charlotte County, Florida

ORLANDO, Fla. – May 12, 2009 – Sales of existing single-family homes in Florida rose 25 percent in first quarter 2009 compared to the same period a year earlier, according to the latest housing statistics from the Florida Association of Realtors® (FAR). A total of 31,412 existing homes sold statewide in 1Q 2009; during the same period the year before, a total of 25,071 existing homes sold. It marks the third consecutive quarter that Florida has reported higher existing home sales; sales levels in the third and fourth quarters of 2008 were higher than the corresponding three-month period of the previous year, according to FAR.

Sales of existing condominiums statewide in the first quarter rose 19 percent compared to the same time the previous year. This marks the second three-month period for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

Statewide sales activity in 1Q 2009 also increased over 4Q 2008’s sales figure in both the existing home and existing condo markets, FAR records show. For 1Q 2009, statewide sales of existing homes rose 4.14 percent over the 4Q 2008 figure; existing condo sales statewide in 1Q 2009 increased 21.1 percent over the 4Q 2008 level.

“Many first-time homebuyers are entering the market now to take advantage of current low mortgage rates, plentiful housing inventory and affordable homeownership opportunities,” says 2009 FAR President Cynthia Shelton, CCIM (Certified Commercial Investment Member). “Typical homebuyers are realizing that now is the time to buy – they can find the Florida home of their dreams at a cost they can afford. Homeownership has always offered a wide range of benefits, including building financial security and increasing a sense of community, but the advantages offered in today’s market are unique.”

One such advantage is a dream come true for first-time homebuyers in Florida, she adds, thanks to a new program that the 2009 Florida Legislature approved through the adoption of the state’s general budget last week. Lawmakers passed a provision setting aside $30.1 million for the Florida Homebuyer Opportunity Program, which will help with downpayment assistance. Beginning July 1, those who qualify for the federal $8,000 first-time homebuyers tax credit will be able to apply for downpayment assistance before they close on the purchase of their home, and then repay the amount borrowed when they get their tax refund.

Shelton adds, “The beauty of this program is that the state will be paid back and, conceivably, more potential homebuyers could take advantage before the Dec. 1, 2009, expiration of the $8,000 federal first time homebuyer tax credit. While details of the program are still being worked out, we are all very excited about the incredible opportunity this offers for thousands of Florida families. It’s $8,000 more reasons to buy your first Florida home!”

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the first quarter compared to the same three-month-period a year earlier, while 12 MSAs showed gains in condo sales.

The statewide existing-home median sales price was $141,000 in the first quarter; a year earlier, it was $202,300 for a decrease of 30 percent. 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 a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 10,143 units sold statewide for the quarter compared to 8,554 in 1Q 2008 for a 19 percent increase. The statewide existing-condo median sales price was $110,100 for the three-month period; in 1Q 2008, it was $177,000 for a decrease of 38 percent.

Continuing low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 5.06 percent in 1Q 2009; one year earlier, it averaged 5.88 percent.

With questions or comments

call Mike Federau, Curt mellon

or Dan McKinney

- Your MLS Detectives Team -

www.MLSDetectives.com

How can one tell if a home has Chinese drywall? It's a simple question with a not so simple answer.

The Florida Department of Health has set up a page on it's web site devoted to this alarming problem.  The site is kept updated as more information becomes available.

Since it helps to understand what kind of damage this tainted drywall can cause, one of the sections on this site is entitled "Case Definition with Pictures," and includes photographs of pipes, wiring and other household items which can help identify the existence of problem drywall.

The web site also explains how the state plans to deal with the problem and includes details on how to file a complaint. For more info, visit the site HERE.

SHORT-SALE FORGIVENESS

In the not-so-distant past, a short sale meant the lender forgave part of the home seller's debt, but the home seller, many times to his or her surprise, had to pay federal taxes on the forgiven amount because the IRS treated it like income.

Under new tax rules, however, the lender sends a 1099-C, Cancellation of Debt, to the home seller in most cases. The forgiven debt does not have to be included in taxable income, and it gets reported instead on Form 982. To be eligible for debt cancellation, the mortgage must have been a primary one on a principal residence; the cancellation occurred between 2007 and 2012; and the mortgage's principal balance must be less than $2 million ($1 million if filing separately). As with any tax matter, home sellers should keep all paperwork to back up their claim in case it's questioned. It's also a good idea to consult a tax attorney on any tax issue. For more information, go to www.irs.gov.

With questions or comments

call Mike Federau or Curt mellon.

- Your MLS Detectives Team -

www.MLSDetectives.com

Real Estate Related Provisions of the Homeowner Affordability and Stability Plan    - by Bill Richardson

FROM THE HOUSING BILL

Fannie Mae and Freddie Mac (the government sponsored enterprises, or GSEs) will refinance the mortgages for 4-5 million homeowners with loans owned or guaranteed by the GSEs. The streamlined refinancing program is designed to help borrowers with loan-to-value ratios above 80 percent up to 105 percent.

$75 Billion Homeowner Stability Initiative to Reach up to 3 to 4 Million At-Risk Homeowners - The goal of the 3-year Homeowner Stability Initiative is to reduce the monthly payment of homeowners to affordable levels using $75 billion from TARP and the GSEs. The program will be available for home owner-occupants “at risk of imminent default” even if they are current in making mortgage payments, as well as those already delinquent. It will only apply to mortgages at or below the GSE conforming loan limits.

Bill Richardson is a District Sales Manager with The Keyes Company’s Boca Blue Lake Office.  He is a former President of the Realtor’s Association, a former Realtor of the Year, and currently a Director of both the Realtor’s Association of the Palm Beaches and The Florida Association of Realtors.

With questions or comments

call Mike Federau or Curt mellon.

- Your MLS Detectives Team -

www.MLSDetectives.com

A summary of the Real Estate Related Provisions of the American Recovery and Reinvestment Act of 2009 - by Bill Richardson

FROM THE STIMULUS BILL

Homebuyer Tax Credit – The bill provides for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. A “first time” homebuyer is defined as anyone that has not owned a home in the last 3 years.

FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e. an area smaller than a county.

The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be usedto assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.

Energy Efficient Housing Tax Credits & Grants - The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation.

Bill Richardson is a District Sales Manager with The Keyes Company’s Boca Blue Lake Office.  He is a former President of the Realtor’s Association, a former Realtor of the Year, and currently a Director of both the Realtor’s Association of the Palm Beaches and The Florida Association of Realtors.

With questions or comments

call Mike Federau or Curt mellon.

- Your MLS Detectives Team -

www.MLSDetectives.com

The stimulus plan that President Obama signed on February 17, 2009 contains a provision for first-time home buyers that will make a HUGE impact on their purchase decision.

Unlike its $7,500 predecessor, which was nothing more than a loan, the new income tax credit is truly what it appears to be – a credit! Under the new plan a first time buyer (defined as someone whom has not owned a home in the last 3 years) will receive a tax credit of 10% of the purchase price of the home with a cap of $8,000. To qualify for the credit the closing must take place between 1/1/09 and 12/1/09 and is a significant gain for this group of potential buyers.

On a typical first time buyer purchase this tax credit will actually exceed their out of pocket costs to close. For example, on an $180,000 purchase, using FHA financing and seller paid costs, the buyers out of pocket would equal $6,300. When they file their 2009 tax return they will receive a tax credit of $8,000 leaving them with a net gain of $1,700!

Unlike the -0- down payment loans that proliferated in recent years, this tax credit requires buyers to make the required down payment and leaves the loan amount at 96.5% of the purchase price. This is no different than what any FHA buyer would be able to receive. The major difference here is that they will be given a tax credit that they can use to purchase home furnishings, window treatments, home improvements, etc. that will help the local economy in the future and provide them with an improved lifestyle.

Now is the time for first-time home buyers.  Let us help you become a owner, give us a call:

Curt Mellon - Direct (941) 626-3640

Mike Federau - Direct (941) 626-3569

www.MLSDetectives.com

According to the 2008 National Association of Realtor’s home buyer study, 87% of buyers will use the Internet to begin their home search, while 34% will actually find their home on the Internet before engaging, or while simultaneously working with, a REALTOR to transact and guide them through the purchase. Only 3% of home buyers find their home in a newspaper.

The MLS Detectives (Curt Mellon and Mike Federau) have been career-long members in good standing with REALTOR.com, the nation’s number one home search website. Their work with REALTOR.com allows for immediate and detailed posting of all their listed properties, and because they post Virtual Tours to all residential listings and most every land listing, their properties are that much more popular and easy to find for those searching the Internet.

Also note worthy is the fact that www.REALTOR.com’s sister site, www.WORLDPROPERTIES.com, gets complete and immediate feeds of all listing data. Between these two powerful search sites, folks around the world have detailed property listings from the MLS Detectives at their finger tips - it doesn't get better than that!

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** Information posted by www.MLSDetectives.com - Mike Federau and Curt Mellon - HomeChoice Real Estate, Inc. Punta Gorda, FL 33950 / 888-207-2029.