James Gaudiosi with Wells Fargo just informed me that the first time home buyer tax credit is extended for military and certain other federal employees serving outside the U.S.  Myself and I would have to believe most Realtors were not aware of this stipulation in the tax credit legislation.  Please see below for the specifics.

Members of the U.S. military and certain other U.S. federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.

If you know of anyone whom meets the above criteria and would appreciate the level of support provided by myself and the Bob Nelson Team, please give me a call or drop an e-mail.  I will be more than happy to help them out.

Military Appreciation Mondays
Supports
Our Military Kids

April is national Month of the Military Child.

I hope you can come out for this month’s Military Appreciation Mondays event at the Old Brogue which will be in recognition of the contributions made by the children of our Servicemen and Women.  I am particularly proud to be bringing back the truly special program – Our Military Kids. These dedicated folks provide support to children of deployed National Guard and Reserve personnel as well as to children of injured service members through grants for enrichment activities and tutoring.  Such activities help these children cope with the stress of having a parent in a war zone or recovering from injury at home.  OMK grants are made to honor the sacrifices that military families make and to ensure that their children have access to sports, fine arts, or academic tutoring programs.
To show your support, simply come out and have dinner at the Old Brogue in Great Falls.  Myself and my cosponsors will each be contributing a 10 percent match (typically a total of an 80 percent match) of your dinner tab to Our Military Kids.

You can also show your support through:
A. The purchase of door prize entries. (ALL Proceeds go directly to Our Military Kids.)
B.  Our buy a vet dinner initiative.  A minimum donation of $25 to OMK entitles you to purchase dinner for one of our vets.
C.  Or you can make out a fully tax deductible donation to Our Military Kids.

Be Certain to make a Reservation for
Either the 5:30 or 7:30 Seating by Calling
The Old Brogue at:  (703) 759-3309

Hope to See You There

Feel Free to Post the Attached Flyer in Your Office
and forward this email to whomever you think may want to attend.

We Would Love to Break 150 Attendees

I am proud to say that last month’s event in support of the Lift Me Up! therapeutic horseback riding program for our injured vets had approximately 125 people in attendance and raised approximately $4,500. This was our best total to date.  I would like to particularly thank Col. Pete Hilgartner (USMC Ret.) for helping out with a book signing at the last two events.  Let me know if you would like to purchase a copy of Colonel Hilgartner’s book “High Pockets War Stories”.  A $10 donation will be made to OMK with each sale.

Please be certain to support my co-sponsors whenever you have a chance.

Mercury LLC

Knight Point Systems

Shiner Roofing and Siding

James Gaudiosi – Wells Fargo Home Mortgage

Danny Ott – George Mason Bank

LSA Title Services

Gary Kaihara, DDS

The Old Brogue

and our door prize donors:

Mr. Wash

Golds Gym

Dominion Title

Turner Framing

Maison Du Vin

Adeler Jewelers

Casa Noble Tequila

Home Equity Builders

Campbell Mechanical

Elite Fitness Concepts

PF Chang’s Restaurant

Great Falls Design Build

Lodgecliffe Bed and Breakfast

According to data from the National Association of Realtors, pending home sales were up 3.7 percent in October, compared to September, and up 32 percent when compared to October 2008.  This was the biggest annual increase in history.  Keep in mind that October 2008 was a historic low so we should not be surprised by the huge increase.

Pending home sales — which equates to the number of contracts signed but have yet to close — rose in all sections of the country except the West.  They were up 20 percent in the Northeast, 11.6 percent in the Midwest and 5.4 percent in the South, but down 11.2 percent in the West.

Part of the surge is probably attributable to buyers rushing to take advantage of the government-subsidized first-time home buyer’s credit, which was set to expire at the end of November but now has been extended through April.  Also, the bulk of sales still are coming from cheaper houses, with little movement in houses costing more than $250,000.

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.

Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.

Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”

Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.

Here’s the region-by-region picture:

• Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
• Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
• South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
• West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

 As you have likely been reading, the First-time Homebuyer Credit program will expire on November 30′th.  What many people have not understood, this means you must settle on your new home by that date.  Having just purchased a new car, I encountered the flurry of activity that occurred on the last few days of the Cash for Clunkers program.  For those who purchased a new car, it was feasible (although not advisable) to wait to the last minute.    WARNING:  This is not the way the homebuying process works.  We are quickly approaching what is the last minute for you to make your purchase.  Unlike picking out a new car, finding the right home can take a week, two weeks or in some cases several months.  Even once you have found the perfect place to call home, you will then need to start the actual buying process.  This has quickly become challenging in our local market since the more affordable homes are disappearing from the inventory.  A simple understanding of the law of supply and demand will tell you that this will create upward pressure on prices and competition for the same properties.  Remember that what you find appealing will also appeal to a great many others.  I just sold my used car to “Joe C.” who has been trying to buy a home in Woodbridge.  He said that he and his fiance have made offers on three homes, only to be out bid either by higher offers or all cash offers.  There are several things that Joe and his Realtor can do to insure that this doesn’t happen which we can easily cover in person. 

Once a contract is ratified, the process will then take a minimum of three weeks to four weeks to get to the settlement table.  And this only if everything lines up perfectly.  With that said, you will need between six and eight weeks to find the right home and settle on it.  We have only 11 weeks until the program expires.  The reality is that three weeks to spare in the homebuying process is equivalent to three hours in the auto purchase world.

If you are reading this post, you probably already decided to purchase a home, but I would suggest reading the about the Proven Path to Home Ownership since it provides a very succint discussion o fthe home buying process.  We can always discuss this in more detail once we get together. 

At the risk of sounding like a high pressure sales person, you really can’t wait much longer to take advantage of the First Time Homebuyer Credit.  Depending on you income, this credit can mean an actual dollar savings of anywhere from $10,000 – 16,000 in pre-income tax money. 

Bob Nelson

Welcome to your northern Virginia real estate resource. Serving Great Falls, McLean, Reston, Vienna, Herndon, Arlington, Sterling, Oakton, Ashburn and the surrounding areas.

Purchasing real estate is a great investment whether you are purchasing your first home, second home or are a seasoned investor. You are invited to visit this site often to view homes for sale, read home buying and selling advice, get information about local schools, and the local communities. (About Me)