Home Buyer Tax Credit Expanded

This afternoon Congress passed an expanded home buyer tax credit. It has already passed the Senate. Details are starting to come out. Obama could sign into law as early as tomorrow.

The following is expected:
1. $ 8,000 first time homebuyer credit extended through contracts written by 4/30/2010; closing by 6/30/2010
2. $ 6,500 credit for people buying a new home who previously owned a home for 5 years
3. Income limit expanded to $ 125,000 for individual; $ 250,000 for couples
4. Maximum property value of $ 800,000

This is all preliminary, and as always, please check with your tax advisor regarding any of these tax related issues.

Here is an article I just found; very general information.

https://webmail.rubloff.com/owa/redir.aspx?C=4c02dac69d8a47daa0d28b9f97ee5755&URL=http%3a%2f%2fwww.google.com%2fhostednews%2fap%2farticle%2fALeqM5hJJraNRE6DjWj2orF7SYJ12PADEAD9BPISHG0

Home Buyer Credit Seems To Be Making Progress

The home buyer tax credit has made a an impact on the housing market. Many agents are working with clients who have recenlty purchased using the incentive of the $8000 tax credit currenlty due to expire on November 30th and a primary motivator.

According to the Wall Street Journal, it appears that Senate negotiators have reached a tentative deal to extend the tax-credit for first time buyer, but whether it will pass is uncertain. CALL YOUR SENATORS!!!!

The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners. Additionally, the income limits would increase from $75,000 to $125,000 for singles and $150,000 to $250,000 for married couples. The expiration date of December 1st, 2009 would extend to contracts being entered into by April 30, 2010 and that they are closed by July 1, 2010.

Home Sales Seem To Be Improving....a bit

Eventhough it may not seem like it to many, home sales in Chicago are improving, and better than many metro cities. According to Crian's Chicago Business, Chicago’s 1.7% month-over-month gain was the fourth-largest increase among the 20 cities, after Minneapolis, at 3.2%, San Francisco, 2.8%, and Detroit, 1.9%. The Standard & Poor's/Case-Schiller home price index has shown a wide spread turn around in 17 major U.S. cities month over month since june.

Full Article

A key element that has contributed to this growth has been the $8000 tax credit stimulus package that is due to expire on November 30th of this year. There is support in Congress to extend it and have it phase out over the coming year.

Senate Majority Leader Harry Reid, a Nevada Democrat, is supporting a four-month extension of the home buyer tax credit. Two other proposals in the Senate would, respectively, extend the credit through June and, most generously, increase the deduction to $15,000 and open it up to all home buyers and those with higher incomes. One or more of these proposals is likely to come up for a vote in the next week attached to a measure that would extend unemployment benefits for 20 weeks.

I know you may not think so, but calls to your senator will make a difference. Lets not lose the momentum.

Price reduction at 3800 N. Lake Shore Dr. #13E

3800 N. Lake Shore Dr. #13E

Offering Price: $619,000

Three bedroom/Two bath

On site valet parking

This beautiful and completely redone home on Lake Shore Drive has just reduced its price to $619,000. If you are looking for a tasteful top to bottom restoration of a 2100 square foot home in a 1920's vintage buiding, you will not be disappointed. With original hardwood floors and molding throughout, this three bedroom unit has a tasteful new kitchen and master bath. To top it off, this building has one of the best parking arrangements for a vintage building on lake shore with onsite valet parking.

For a complete virtual tour visit 3800 N. Lake Shore Drive #13E

New Listing in River North at 715 N. Franklin

715 N. Franklin

I just listed this unique free-standing brick building in the heart of the gallery district of River North.

Home of the former Adams Fine Art Gallery, the building located at 715 N. Franklin is about 2200 square feet on three levels and is ideal for an art gallery, design studio, retail store or offices. And it is just steps from the Chicago Ave. el stop.

Building is in good condition and is listed for $475,000. Call me at 312.368.3280 for more information or go to http://www.andygersten.com/property/6248312 for details and a full virtual tour.

YTD sales improve for the 5th consecutive month

A fantatic source for sales figures in the Chicago condo market, chicagocondosonline.com uses reional multiple listing service data and compiles statistic to help you better understand the market as a whole. The primary data summary is below along with links for more details and prior reports. The data is quite mixed but one quite positive trend is the decrease in the reduction of sales to the prior month.


Year-to-date sales of Chicago condos for the first nine months of 2009 are

* Down 44% in total dollar volume, to $2.2 billion
* Down 33% in units closed, to 7,073
* Down 13% in median sales price, to $276,000
* Up 16% in average market time, to 151 days.

This shows an improving year-to-date market in both dollars and units for five consecutive months:

End of April: Dollars down 59%, units down 51%
End of May: Dollars down 57%, units down 48%
End of June: Dollars down 53%, units down 44%
End of July: Dollars down 49%, units down 39%
End of August: Dollars down 47%, units down 36%
End of September: Dollars down 44%, units down 33%

Comparing September sales to August:

* Units closed were down 6%, from 1,030 to 973 closings
* Dollar volume was down 10%, from $317 million to $285 million
* Median sales price was up 1%, from $263,900 to $266,500
* Average market time was down 1%, from 149 days to 148 days

For details on month-over-month and year-over-year: click here.

For the full story: click here.

Easy Condo Credit?

Today's Crain's Chicago ran a video story about MB Financial and the "easy credit" market for condos. Some banks including Wells Fargo are once again offering 95% financing. MB Financial is offering up to one whole percentage point less to buyers than competing lenders for some projects it has underwritten. With the stimlus potentially expiring November 30th, accommodating financing at still attractive rates, and home values at their lowest levels in years, it is a great time to buy...now we just need more buyers.

Signs of a Housing Recovery seem to be here...

This recent article in The Wall Street Journal is giving sellers renewed hope and confirming what many agents seem to be experiencing. The market is definitely picking up and contracts are coming in once again although pricing is still unknown at the moment as it seems we may have a little more retraction yet to go before values stabilize.


JUNE 3, 2009
Index Suggests Home Sales Are Set to Increase
By JUSTIN LAHART

In another sign that the housing market may have begun to recover, the number of people who signed contracts to purchase homes increased for the third month in a row.
Associated Press

A sign indicates the pending sale of a home in Little Rock, Ark.

WSJ's Nick Timiraos says that there is more good news for housing as the pending home sales index has risen for the third straight month, but may not entirely be out of the woods yet.
The National Association of Realtors said its index of pending-home sales rose 6.7% in April to 90.3 from 84.6 in March. Increases in contract signings typically lead to more sales a month or two later.

The relationship between the two has been less steady since the fall, as more would-be home buyers have struggled to get financing. But the increase in signings is large enough to augur more home purchases, said Joshua Shapiro, an economist with MFR. "Clearly, within the next couple of months there's going to be a decent increase in actual home sales," he said.
Much of the April increase came from the Northeast, where contract signings rose 32.6%. Signings rose 9.8% in the Midwest and 1.8% in the West; they slipped 0.2% in the South.
Year over year, the index was up 3.2%. The 6.7% monthly increase was much larger than the 0.5% gain analysts had projected.

Last week, the Realtors said sales of previously owned homes rose in April, with sales of foreclosed and other distressed properties accounting for nearly half of the total. The Commerce Department said sales of new homes also edged higher in April.

—Jeff Bater contributed to this article.

Write to Justin Lahart at https://webmail.rubloff.com/owa/redir.aspx?C=22a7e0d379a14e06b3772ea4b7d798bf&URL=mailto%3ajustin.lahart%40wsj.com

Tax Credit CAN be used as a down payment

The Secretary of the U.S. Department of Housing and Urban Development told REALTORS® gathered in Washington, D.C., that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the first-time buyer $8,000 tax credit as a down payment, a move promoted by NAR.

1771 W. Ainslie $729,000

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View a virtual tour or read property details.

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Explaining the First Time Home Buyer Tax Credit

I still am getting questions on the first time home buyer tax credit. It is fairly easy to understand and to help, I have included a video from Rob Dietz, Ph.D., director of tax issues for the National Association of Home Builders. For those of you whoe are on the fence, this is a great opportunity to help you get into your first home. The key pieces of this legislation are related to your personal income and the amount of the purchase. Hopefully this video will clear things up.

New Fannie Mae Rules Making It Tougher...

Fannie Mae, the government-sponsored group that makes adequate funds available to mortgage lenders, has implemented new guidelines as of March 1st that unit owners and associations should be aware of. These changes have impeded many sales lately. Some of the primary issues concern clarifications of owner-occupancy ratios, association insurance, lawsuits and new guidelines for new construction and newly converted projects. It has been my experience that buildings which has once passed with flying colors, now don't qualify and as a result, lenders are rejecting these loans. This is trouble for both buyers and sellers.

A recent article in the Chicago Tribune outlines some of the most relevant changes.

Oh Happy Day....that's what consumer indexes are saying

In a recent AP article, the New York-based Conference Board stated that the Consumer Confidence Index rose more than 12 points to 39.2 up from a revised 26.9 in March. This exceeds ecomonmists' expectations of only 29.5 and is the highest since last November's reading of 44.7. The survey showed a significant improvement of consumer's short-term expectations of the economy. The most encouraging news came from the retail and housing sectors and may suggest that the housing market is finally bottoming out.

Housing Statistics...Traditional vs. Foreclosures

The Chicago Association of Realtors recently posted very interesting data comparing traditional sales to forecosed and short sale transactions. It is a mixed bag of information. In the single family home category, traditional transactions were markedly stronger while in the condo and multi-unit categories, foreclosures and short sales seemed to stand out. This trend is not quite as prevelant in the the higher priced areas of the city.

Maybe, Just Maybe...

There has been much conversation over home values and when will we hit the bottom. Three years ago, just before the housing bubble began its rapid delfation, income to home value ratios were at a staggering 4.5. Current data shows that median selling prices for new and existing homes combined now equal 2.9 times median household incomes, nationwide. According to historical data, this is exactly the ratio that prevailed during the booming 1980's.

Although nerves over the economy could keep many potential homebuyers on the sidelines, this latest housing data suggest that home prices may actually be stabilizing.

A recent article by chief economist Irwin Kellner of Marketwatch, suggests that home prices are closer to stabilizing than any time in the past nine years. Combining that with attractive interest rates, unlike in the 80's (if you recall), maybe, just maybe, this is a GREAT time to consider a home purchase.

New FHA Loan Limits

It appears something is happening. As of today, March 4th, FHA is increasing its loan limits to hopefully stimulate the housing market...well, we can hope. The new stimulus bill that was signed on Feb 17th - called the American Recovery and Reinvestment Act of 2009 - allows for higher loan limits on FHA transactions. These are temporary loan limits starting March 4th until the end of the year, December 31st, 2009. Transactions must close by the 31st in order to access the higher loan limit, with no exceptions.

Below are the temporary loan limits:

• 1 unit $417,000


• 2 units $533,850


• 3 units $645,300


• 4 units $801,950

This is great news and will allow access to additional transactions that we would have not been able to do before. Remember the advantages of the FHA program:

• 3.5% down payment (1-2 Unit)


• 10% down payment (3-4 units)


• The down payment can be a 100% gift from a relative


• No minimum credit score (unlike conventional programs)


• No reserves required (unlike conventional programs)


• 2 years from a Bankruptcy discharge date (4 years for conventional)


• 3 years from a Foreclosure discharge date (4 years for conventional)


• 85% of rental income is added to borrower's income (75% for conventional)


• No owner occupied borrowers (Kiddie Condo - parents, etc...)


• Renovation Loans allowed

Rubloff Wells Fargo, also known as RWF Mortgage, has been successful securing these loans. For more information, contact Brian Cumpton at www.chicagolender.com. Tell him Andy Gersten sent you. Remember these new guidelines are only in effect through December 31, 2009.

2009 will be a good time to buy

Many consumers are wondering when will the real estate market hit the bottom and when should I consider purchasing...well I think we are about there. Many agents are actually experiencing an increase in showing activity and contracts since the beginning of the year. A recent forecast from Moody's Economy.com suggested that the Chicago region will be hit less than other markets. They have estimated that the three year drop for single family homes which should begin recovering in 2010, should hit 17.1% before recovery begins. The average decrease in rthe area has been 13.3% since mid-2008 compared to a national decline of 21.3%. Check out a recent article from Crain's that includes a nice graph comparing major metro areas.

So we may be getting close afterall.

New Sales Data...Sales down but Median Prices Up

It's a mixed bag of news: Statistics for 2008 show a slowdown in the Chicago area market compared with the same data in 2007. Sales volumes are down and market times have increased. The good news is that the median price for condos has once again gone up.

According to 2008 city condo sales data from Midwest Real Estate Data (MRED) the dollar volume of condo sales in the city of Chicago decreased in 2008, by 27% from $6.4 billion to $4.7 billion.The number of units sold in the city dropped by 30%, from 18,061 to 12,596. The average market time increased by 22%, from 117 days on the market to 143 days. Unlike in many other cities in the nation, the median sales price of city condos continued to rise, by 5%, from $295,400 to $310,032.

Local experts, including Dave Hanna, president of the Chicago Association of Realtors (CAR), attribute the increase in median sales price to the hundreds of new-construction units that we sold (contracted for) in the three years before the market declined, but that closed in 2008.
By comparison, MRED data released by CAR show that all single-family attached (Type 2) housing, a broader category that includes condos, decreased by 29% in unit sales, and median sales price was up by 8%.

In the city, 2008 condo sales made up 53% of all residential transactions (including multi-unit), compared to 58% in 2007. Based on the database maintained by ChicagoCondosOnline.com, there are an estimated 260,000 condo units in more than 12,000 buildings in the city, with several thousand units added annually. Based on the 260,000-unit estimate and 2008 sales of 12,600 units, the turnover of units in 2008 was 4.8%.

According to MRED figures, the citywide median sales price of condos sold in 2008 was $312,032, or $284 per square foot.

For more details on Chicago's condo market, visit Market Overview on ChicagoCondosOnline.com.

Revised Tax Credits For First Time Homebuyers

It looks as if the stimulus package has finally been signed. So what does it mean to home buyers now?

There have been many revisions on this issue and the end result is very close to the homebuyer tax credit that is in place now. Click here for a side by side comparison chart.

The final bill provides for a $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.

The bill also 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. For the few areas where the 2009 limits were higher, the higher limits will apply. 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.

The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.

Parking Meters Rate Increase In Effect

Be prepared with quarters...and a lot more of them.

Beginning this weekend, rates have already gone up in the loop and the near north, near west and near south sides. According to the Chicago Tribune, the loop is now up to $3.50 an hour beginning Friday, February 13 and the near north, west and south sides go up to $2.00 an hour beginning February 16th.

The rest of the city is as follows:

• Lincoln Park to $1.00 an hour February 16-18
• North Side to $1.00 an hour February 20-28
• West Side to $1.00 an hour March 1-2
• South Side to $1.00 an hour March 5-9

Although the meter rates in many parts of the city have gone unchanged for years, the city has decided to sell of its vaulable income streams for over $1 billion dollars. Revenues are near $20 million per year but the lump sum injection will help pay for much needed public works projects now and put some money in the coffers for short falls in the coming years. But then what? That can only last so long and a $200 million annual budget shortfall can only be sustained for so long.