2009 First Time Home Buyers Tax Credit

How can a first time home buyers credit benefit me?

During the economic crunch every little bit helps. How about a tax credit that inspires college students, newly weds, and even those who have not owned a primary residence in years, to make one of the most rewarding purchases Americans strive for??

As a Realtor I am here to help you with that. Buying a home can be very exciting and overwhelming at the same time. It is essential to take the appropriate steps while coming to a purchasing decision. The good news about the tax credit is that any home qualifies: new construction or preowned. There are no limitations other than the income used to qualify for the mortgage. In other words, as long as the home has been purchased and lived in as the primary residence after January 1, 2009 and before December 31, 2009, the credit can be applied to your 2009 tax return. As always, please seek financial advice from your certified public accountant.

Who qualifies as a “first time home buyer” ?

Anyone that has never had the glory of home ownership is automatically qualified for this tax credit in 2009. However, if you were once a homeowner but have not owned in the past 3 years, then the credit also applies to you. When it comes to joint ownership, if either spouse has owned a home as a primary residence in the past 3 years then the married couple does not qualify. Since we are strictly dealing with primary residences, a vacation home or rental property does not affect the qualification for the first time home buyers tax credit.

Tax Credit or Tax Deduction? Let’s not get confused!

One thing I like to educate my buyers on is the difference between a tax credit and a tax deduction. This particular credit for 2009 is $8000.

A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

With that being said………

….. Now is such a good time to become a homeowner. Low interest rates, reasonable prices, and tax incentives is evidence that owning a home can be affordable and rewarding at the same time. Talk to your Realtor today. We are professionals that strive in today’s market and committed to providing optimal customer service and begin lifelong relationships.

If you have any questions feel free to contact me. I will be glad to set up an appointment in hopes of finding the perfect home for you!

Northwest Arkansas Home Prices and Market Report – April 2009

April Buyers bring May closings! If last month’s Northwest Arkansas Home Prices and Market Report was uplifting…this month’s Market Report should have you singing in the rain. While prices in Northwest Arkansas are nowhere near their highs of several years ago, there is a definite bullish trend in prices, absorption rates, and pending and closed inventory that should make buyers get out and ‘get while the gettin’s still good.’ National buyer confidence for house is trending upward and the trend supports the numbers in this month’s Residential Real Estate Market Report for Northwest Arkansas.

Northwest Arkansas Home Prices and Housing Market Report

While the average home sale price did dip a bit from last month…I stand firm that the shift to higher home prices has begun. Many of the sales closed this month were foreclosure inventory coming off the market and so drove the average sales price of homes in Northwest Arkansas down some this month. I fully expect May numbers to show an inclrease in sale prices over April. Pending home sales remain strong this month over the last few showing that buyers are buyer and and sellers are selling…now that’s a magical equation. Just to recap, February had 526 pendings, March had 1092, April had 843. Compare this month to all my monthly market reports here.

Here are the running average home prices in Northwest Arkansas

As you can see…the average sales price for homes that closed in April fell a bit from March, but this is mostly due to the high ratio of foreclosure sales to standard or owner-occupied sales.

April Numbers by City

Here are the April number broken down by major city. It has been pointed out to me recently that, when added together, these numbers don’t equal the numbers for all of Northwest Arkansas. This is because the numbers below are just for the cities involved…rural, outlying areas, and smaller satellite cities change the figures when put into the greater Northwest Arkansas equation.

As usual, number gurus can cross reference the numbers above with past months numbers to see the nitty gritty details. For the rest of us, here are the graphs.

Northwest Arkansas Pendings, Solds, and Expireds by Month for 2009

Sales up, pendings down a bit but still up, and expireds down…pretty good news for sellers.

Current Inventories in each Northwest Arkansas City by Month

Not to much we can deduce here except that inventory levels will probably remain stable as both supply and demand increase over the next few months.

Average Days on Market by City

think this is one of the best (and most telling) signs of a recovery. As absorption rates fall by leaps and bounds we see a healthy market come back into focus. Based on these number I would say the bottom of the market was in February 2009. Certain neighborhoods and price ranges obviously differ, but everything points to the bottom being in February. As absorption rates fall you will see prices stabilize more and demand creep back up to the level of supply.