Weekly Market Activity Report from MAAR

One. That's the number of times over the last 33 weeks that we've had fewer pending sales this year than we did a year ago. And the week in question was Thanksgiving—a week where making an offer on a home is typically ignored in favor of turkey and afternoon naps during another loss by the Detroit Lions.

The buying party continued for the week ending February 14, as there were 731 pending sales in the Twin Cities—up 17.1 percent. Over the last three months, there have been almost 1,200 more pending sales than there were last year. During this time period, 60.3 percent of sales were lender-mediated foreclosures or short sales.

Increased sales means increased absorption of inventory means less houses for sale. There are approximately 4,000 fewer houses for sale right now than there were at this time last year, a drop of nearly 14 percent. New listings remain sluggish as well. The most recent reporting week saw a 9.5 percent year-over-year drop.

Here’s a warning for potential borrowers: Nervous lenders have tough new rules and are paperwork crazy.

"Borrowers are going to have to prove they are the borrower they say they are," says Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.

Gumbinger says homebuyers should consider these things before they apply for a loan.

1. Down payments are critical. Borrowers should expect to put down at least 10 percent for a “conforming loan” – a mortgage that Fannie Mae and Freddie Mac will purchase.

2. Credit scores count. A 720 on the 850-point FICO rating scale will get a borrower access to the best rates. Rich Bira, branch manager of FCM Direct Lender in Chicago, says: "A score between 720 and 739 gets 0.125 percent added to the rate, a score between 700 and 719 gets 0.375 percent added to the rate, and a score between 680 and 699 gets 0.5 percent added to the rate.”

3. Consider VA and FHA. Borrowers without down payments or with less than stellar credit scores should consider these government-insured loans offered through the Federal Housing Administration of the Veterans Administration. 4. Unearth the records. Before applying, borrowers should organize tax, banking and other records that prove income, savings and debts. They should also expect to be patient about what may seem to be endless requests for information.5. Get rid of debts. Limiting debts, including what borrowers expect to pay for the mortgage, to less than 43 percent of gross income is important.

Source: Chicago Tribune, Mary Umberger (02/15/09)

Weekly Market Activity Report from MAAR

Did you find your "ain true love" on Saturday night? Or were you out there showing houses and adding to the already sizable gains in pending sales seen in the Weekly Market Activity Report? Either way, it appears that more Twin Cities home buyers are finding their hearts' desire as we enter the second month of 2009.

New listings continue their seasonal upward movement, with 1,780 homes for the week ending February 7. This is a 16.2 percent decrease from the same week last year—an ongoing good news trend for an oversupplied market. For the same time period, there were 745 pending sales, an increase of 17.5 percent compared to last year at this time. Sales have increased more steadily than new listings so far this year, which has helped reign in our Months Supply of Inventory to a healthier 7.7 months—down 13.5 percent from last year.

Active listings for sale continue to trail year-over-year numbers. There are currently 25,537 homes for sale, a 12.4 percent decrease from last year. Thankfully, increasing affordability means that a healthier share of these homes should find true romance with a buyer than in previous years.

This information was compiled by Minneapolis Area Association of Realtors.

Home Buyer Tax Credit

The White House and Congress agreed to give first-time home buyers a tax credit for 10 percent of the value of a home, up to a maximum of $8,000. The tax credit is part of the $787.2 billion economic stimulus plan, which President Barack Obama is expected to sign early this week. The tax credit was scaled back from an earlier Senate proposal of $15,000.

The tax credit will apply only to first-time home buyers who purchase a home from the start of 2009 to the end of November 2009. The credit begins phasing out for couples with incomes above $150,000 and individuals with incomes above $75,000. Buyers will have to repay the credit if they sell their home within three years.

The National Association of REALTORS® (NAR) estimates that the tax credit will result in an additional 200,000 home sales and enable many new home buyers to enter the market. According to NAR, first-time home buyers purchased 2.2 million homes last year. This represented 41 percent of all U.S. home sales, up from 39 percent in 2007 and 36 percent in 2006.

Information was first published by Coldwell Banker Burnet Hot Wire Xpress.

FAQ: Senate Stimulus Bill and the Home Buyer Tax Credit

Thanks to Brian Call of Rubicon Motgage Advisors LLC, here are some answers to your questions about the Senate Stimulus Bill.

There have been several questions about the proposed $15,000 home buyer tax credit that is in the Senate version of the economic stimulus bill. It is important to remember that the proposed credit is far from a done deal. If it passes, it will have to be reconciled with the House version of the stimulus bill, which modifies an existing $7,500 home buyer credit, repealing a provision that requires buyers to pay it back.

There are some big differences between those two versions. The Senate version is nonrefundable, meaning you can only receive the credit if you owe federal income taxes. The existing credit is refundable, meaning you get a check from the government even if you do not owe income tax. And the current credit applies to first-time home buyers, defined as anyone who has not bought a house in three years. The Senate version is open to existing homeowners.
Here are some more

Frequently Asked Questions:

If I bought a home and used the $7,500 home buyer tax credit, can I retroactively receive $15,000 credit if it becomes law? No.

Are there any income restrictions on the tax credit? The Senate version currently has no income limits. The current $7,500 tax credit phases out on buyers with incomes exceeding $75,000 for individuals and $150,000 for married couples.

When will the new tax credit go into effect? The Senate version would take effect when the bill is signed by the President into law, and it would last for one year.

Can I take the tax credit this year? Yes. The Senate proposal would allow buyers, even those who purchase in 2009, to claim the credit on their 2008 taxes.

The proposed tax credit is nonrefundable. What does that mean? You can only receive the credit to the extent that you owe federal income taxes. The Senate proposal would give home buyers two years to claim the credit, so buyers could claim a $7,500 credit in 2009 and a $7,500 credit in 2010. A family of four that makes less than $82,000, for example, could have a tax liability of less than $7,500 and they would not receive the full value of the credit.

Are there any repayment requirements on the tax credit? No. The Senate proposal does not require the credit to be paid back. The House proposal eliminates a 15-year repayment provision on the existing $7,500 tax credit.

If I am eligible for the current $7,500 credit, am I also eligible for the $15,000 credit? While the $15,000 credit has fewer restrictions than the existing credit, there is one big difference: because the credit is nonrefundable, if you have a low federal income tax liability, you could end up receiving more money with the current credit than the larger, proposed credit.

Are there any increased down payment requirements on the proposed tax credit? No. A separate measure has been introduced in the House that would expand the tax credit to $15,000 but would require a 5% down payment on mortgages. The Federal Housing Administration currently requires a minimum 3.5% down payment.

Can I use the tax credit to buy a second home? No.

How long do I have to live in my home after I purchase it with the tax credit? The Senate version requires buyers to pay back the credit if they sell the house less than two years after they buy it.

If you are looking for more information please contact Eric or Sharla at 952.470.2575 or Brian Call at briancall@rubiconmortgagellc.com.

http://www.staffordfamilyrealtors.com/

Weekly Market Activity Report from MAAR

For the week ending January 31, new listings continue at a lower level than seen last year, clocking in at 1,635—a 15.3 percent drop. Conversely, pending sales continue to raise sand with 673 recorded for this week's report—25 percent above last year. Basically, this is all welcome news. Having fewer listings on the market, combined with an increase in pending sales, helps to reduce the Months Supply of Inventory to 13.5 percent when compared to last year at this time—down from 8.9 to 7.7 months. This means it will take the current supply of houses for sale 7.7 months to sell (on average).

The Percent of Original List Price Received at Sale continues to fall, with the January figure of 89.5 sitting at 1.6 percent less than 2008. It's important to consider sales prices of foreclosure homes and how they affect this figure.

Our new Housing Affordability Index jumped to 202 in February. This is a new record and means that the median family income is 202 percent of what is necessary to qualify for the median-priced home. Again, we must consider how the sales prices in the lender-mediated market are affecting this figure, but we can say with some confidence that there are a number of very attractive buying opportunities in the local housing market. If we are able to maintain these trends, we'll be well on our way to killing the blues. And to this current market malaise, we'll be singing "gone, gone, gone (done moved on)."

Information compiled and published by Minneapolis Area Association of REALTORS.

NEW LISTINGS

Announcing Three Great New Properties from Stafford Family Realtors

We are excited to announce three new listings that will be coming to the MLS over the next month or so.

Our first property is located in Chanhassen in the Springfield neighborhood. This property is an executive single family home in a beautiful neighborhood. Family friendly this neighborhood sits close to shopping, entertainment, schools, parks and the new 312 corridor.

Are you looking for the perfect destination for your vacation home? Located near Cook, MN, we will soon offer a 7.55 acre property on Lake Vermilion. Ultra private and sited on an exclusive part of the lake, this home is upgraded and comfortable, great for family vacations or a quiet get away.

We also will be bringing on a great family home in Carver Bluffs of Carver. More information to come.

Please contact Eric or Sharla Stafford with any questions.