GOOD DAY!! As you can see by the article below, it appears that the very successful First Time Homebuyer Tax Credit has been extended until April of 2010 AND it also has some benefits to current homeowners. Although this is not signed, sealed and delivered, all of the conversation out of Washington says that this extension will be signed by the President by the end of this week. One item to consider is that the original bill states that a purchase contract must be signed by April 30, 2010 but may settle as late as June 30, 2010. This is great news if you are buyer and were not sure that you could close on a home by the end of this month; and if you are currently a homeowner, this may encourage you to move up to a home that may have just appeared on the market. There are some caveats, such as remaining in the newly purchased home for three years, but the credit is a true credit if you remain for longer than the three year timeframe. As is with all cases, if you have tax questions, please contact your tax professional. And if you are looking to take advantage of the credit and need assistance, please contact me at your convenience at Don@DonRoth.com or visit my web site, www.DonRoth.com. You can view all the available homes in the area by clicking the search listings tab.

RISMEDIA, November 5, 2009— After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.

The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.

For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don’t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. “It’s only for a primary residence,” said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. “In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.

Hello to fall. I’m looking out the window as I write this report after just having come in from the outside and the feel of fall is in the air. I’m sure there will be many of non-fall like temperatures in the coming weeks. We hope!

I am pleased to report the real estate activity for September 2009 compared to September 2008 and the anticipated improvement that I have been speaking about in the past few months is coming to fruition. In addition to the improvement in the real estate market, I have made, I hope, an improvement of how the results are formatted. I have changed the format from municipality to school district because more and more buyers are looking at school districts rather than the municipality. Hopefully, this will give a better comparison since in many instance the school districts overlap more than one municipality. I hope you will find this change beneficial.

The number of homes sold in September 2009 compared to September 2008 declined by 3%, and the average sales price declined by the same 3%. These numbers are the best year over year numbers that we have seen in the Greater Harrisburg Market in some time, and although the coming months may not totally reflect that trend, I think it is again giving home buyers and sellers a true indication of what we can expect in 2010. The average sales price for the area for September was $187,007, and the days on market increased to 78 days. The number of homes available in all residential categories increased slightly to 4,271 properties.

The trend in the type of financing, FHA and VA mortgages, was 45% of the total transaction compared to 27% in 2008. Much of this is still due to the $8000 First Time Home Buyer Tax Credit, which will expire November 30, 2009; more on that later. But in retrospect, these results are improving and again that trend should continue.

As can be seen in this report, as well as previous reports, the variances in price and days on market can be substantial on a month to month basis, but overall, the numbers are representative and only a comparison by neighborhoods will give you the specifics for areas that a buyer or seller may be looking. If you need specific details on neighborhoods, please contact me at Don@DonRoth.com.

With respect to the continuation of the $8000 First Time Home Buyer Tax Credit beyond November 30, please click on the following link
http://www.donroth.com/Blog/First-Time-Home-Buyers-Tax-Credit-May-Be-Extended

Legislators in Congress are considering some type of the popular First Time Home Buyer Tax Credit past the November 30, 2009 deadline. In my opinion, for the buyers and sellers in the Greater Harrisburg, PA region, this would be an excellent event since we have seen the positive effects in this area. Knowing how long it takes to accomplish the passage of legislation in Washington, this is not a given and if you are buyers who qualify for the current tax credit, you may want to contact you local legislator and encourage the extension beyond November 30. Please read the article from the attached link. And if I can answer any questions concerning who qualifies, please contact me at Don@DonRoth.com.

Click Here to View Article

The real estate activity for August does provide some interesting insight to what is occurring. Namely that the average sales price ($188,352) declined by approximately 13% from August 2008; and at first, that appears to indicate we have not reached the bottom. That may be true, but it is my opinion that it has to do more with the first time home buyers tax credit and buyers taking advantage of the credit, which in many transactions impacts the lower priced homes rather than the market falling off the cliff. In many instances, that is good news because the underpinnings of the market needs for the lower priced homes selling before the higher ones occur. So I think the basing process that I have mentioned in previous months is continuing and we will see a stabilized market by the end of this year..

Again with respect to an extension of the tax credit into 2010, it is still a guessing game whether it will remain in tact, be modified or the dollar amount increased. As we all know, there is a great deal of talk in Washington and little action. I hope that changes. If you are still considering using the tax credit, please remember that the sale has to be finalized by November 30, 2009. So, it would be my recommendation that every buyer have a home under contract no later than September 30, 2009 due to changes in some of the financing packages available.

As you can see, there are some substantial variance between 2008 and 2009. My research shows that in a few communities there were some higher priced homes settle that are out of the norm and misrepresented a more stable environment that normally occurs. But a very positive indication is that in approximately 75% of the selected communities have seen a decrease in the days on market when compared to July 2009. And I know of multiple offers on selected homes reappearing and that in, my estimation, is a very good sign. Again, as before, if there are any real estate related questions, please contact me at your convenience at 717-579-2879 or email at Don@DonRoth.com. Also, please check out my web site for probably the most current information on homes that are currently for sale in the area by clicking on “Search Listings”.

The real estate sales activity for the Greater Harrisburg area containing the counties of Cumberland, Dauphin and Perry and segments of York, Lancaster and Lebanon Counties continued to stabilize and appears to be improving for the comparative periods of July 2008 versus July 2009. And although the average sales price for homes in the area declined by approximately 5% for the year over year comparison, there was a 3% increase in the average sales price in July 2009 when compared to June 2009 to an average of $198,409. As we all know, this is the primary selling and buying season for real estate and this has not deviated from previous years. That traditional high activity has been, in my opinion, fueled by buyers finding attractively priced homes, very competitive mortgage rates and the $8000 tax credit being offered by the Federal Government. Also contributing was a substantial increase in buyers using FHA and VA financing options (38% of all transactions in July 2009).

With respect to any extension of the first time homebuyer tax credit into 2010, the simple answer at this time is that there is no answer. There has been talk in Washington about extending or even expanding the credit to all buyers, not just first time buyers, but with all that is on the plate legislatively, including the budget and health care debates, I do not think anyone is going to guarantee the extension at this time.

Below are the average sales prices and days on market (DOM) for select municipalities on the East and West Shores in the Harrisburg area.

You can see that there are wide variances in average sales price and days on market from year to year. There are many explanations for these variances, but when reviewing previous comparative periods, I saw wide swings over a period of time that did not totally impact the overall trends. And, as I have been saying for a few months, that although the sales numbers and average sales price are down year over year, we are seeing a basing process that will lead to higher prices down the road. I cannot tell you when, but we can only be sure after we have hit the bottom and the same can be said of the lower mortgage interest rates. If you have any questions or need any additional information, please contact me at your convenience. And if you are considering a purchase of a home and want to inquire about prices and locations, please go to my web site www.DonRoth.com and click on the search listings button and get current listing information.

Since we are now in the middle of July, I thought it to be important to remind buyers who are considering the purchase of a house that time is running out to take advantage of the credit. If you are going to purchase a home and take advantage of the credit, settlement must occur before December 1, 2009. As a reminder, here are some of the additional eligibility requirements.

• A first time home buyer is one that has not owned a residence within the last three years.
• Primary residences include single family homes, condos and townhomes.
• The $8000 maximum credit is determined by 10% of the purchase price up to $8000. So it is very easy to see that any home purchase over $80,000 would qualify.
• Single and married buyers with incomes of up to $75,000 and $150,000 are eligible for the full credit. After those limits, there are pro-rations up to a certain dollar amount before the eligibility is no longer available.
• None of the $8000 can be used for a down payment but can be used for closing costs to finalize purchase.
• And most importantly, this credit does not have to be repaid.

I have been asked many times by buyers “is the credit going to be extended for 2010?” My answer is I do not know. There are many variables, most political, that will play into any determination whether there is an extension for 2010. But remember, any extension can be changed or modified and could have many unintended consequences for buyers in 2010.

Why is now a good time to consider a purchase? Home prices are beginning to firm somewhat in the Central Pennsylvania market, and by the end of 2009, I think there will be the beginnings of appreciation in the overall market, albeit a small appreciation. And secondly, mortgage interest rates are still extremely attractive, currently in the area of 5.25%, meaning that the principal and interest payment on $100,000 is $552.20 per month.

Finally, if you need any additional information, please contact me at Don@DonRoth.com or if you want an idea of what is available in the market right now, in any price range, please go to my web site and click on the search listings button and you can find the home you have been looking for. Make it a great day.!!

Hope reappears in home market

By Eric Veronikis
6/18/2009 3:18 PM

5,700 views

I am happy to provide to real estate home buyers and sellers new services in order to provide the most up to date information that is available. First, on my revised web site (www.DonRoth.com) you can search real time for homes that are available for sale by clicking on the tab “search listings” and you can search by towns, zip codes and county to find information on specific properties and by price range. This category is updated many times a day, so the information is very current. And second is our company’s 24/7 phone number, which provides you one phone number to get all the listing information by using the listing ID from Prudential Homesale Services or any other real estate company in the area. So when you are out driving around, you just need to dial 717-798-3858. With the information changing so rapidly, I look at these two services as an aid to your real estate needs. In all cases, information on my web site is going to cover much of the area including Cumberland, Dauphin, Perry and York counties and it is provided courtesy of the Central Penn Multi List. If you have any questions or would like to have additional information on any of the homes you see, please contact me at Don@DonRoth.com.

Great News
2009 First Time Home Buyer Tax Credit
Revised Guidelines for a Home Purchase

On May 29, 2009 HUD announced improved guidelines to assist first time home buyers for the purchase of a home. Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5% down payment.

There remain many sources of assistance for buyers needing help with the 3.5 percent down payment, including many state and local government instrumentalities and nonprofit lenders.

In addition, some state housing finance agencies, such a PHFA in Pennsylvania, have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their down payment. These programs are separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment

Who Qualifies?

First-time home buyers, who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000 The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Depending on the purchasers circumstances please check with a local lender in your area and if you are now sure, please contact me at your convenience.

Source: HUD and The National Association of REALTORS®

The real estate market in our area is beginning to experience some improvement when compared to the previous four months of 2009. The average sales price increased by 3% in May compared to April 2009. The comparison of the number of sold homes decreased slightly when compared to May 2008, but the month to month increase in the sales price is a very good indicator going forward and although the days on market had a slight increase from April, the trend appears to be moderating.

As in previous months, the lower priced homes are selling at a quicker pace than the homes in the higher ranges which right now is over $350,000, but some increased activity is occurring. Part of the increase, I’m sure, has been the $8000 federal tax credit that is for first time homebuyers and which now has been modified by HUD to allow buyers to monetize part of this credit and allow the credit to be used to pay for closing costs for the purchase of a home. Combine the credit with still extremely low mortgage interest rates and we can see why there has been sustained activity in what we would consider the first time homebuyer market. And I would anticipate this positive trend to continue in the coming months. Another positive sign is the number of pending but not settled transactions is up about 45% since the end of 2008, giving a good base for future sales to occur in the near future.

Again as last month, the percentage of homes financed by FHA and VA has increased from last year. And as I mentioned in April this trend will continue for a while. For those sellers that have not been involved in this financing, the guidelines are now very similar to conventional financing and as you can see by the percentages, this type of financing has become the norm in today’s environment. And if you have questions about the value of your home or activities in your community, please contact me at your convenience. Just remember all real estate is local and although there has been a correction, we are still in good shape when compared to other communities across the country.