Knoxville Tennessee Real Estate Blog

By now most have probably heard that Congress passed an extention of the $8,000 tax credit for people who buy a home and have not owned one in the past 3 years. Most call it the “first time buyers’ credit even if that is not entirely accurage.

Here’s a list of the relevant changes in the extension that were not all present in the original one.

• Extends the deadlines for purchasing and closing on a home.
• Creates a credit for existing homeowners who buy a new principal residence.
• Raises the income limits for those claiming the credit.

Here’s a few common questions people have had:

Question: If I’ve already purchased a home in 2009 can I apply for the credit now or do I have to wait until I file my 2009 tax return?

Answer: You have two choices; you can either file an amended return for 2008 or just wait until 2009 and claim it then.

Question: I’m in the process of buying right now but have not closed on the purchase. Can I get that credit now so I can use it for a down payment?

Answer: Nope, sorry, you have to actually own the home (have closed) before you can qualify for the credit. However if you live in the state of Tennessee we have a solution for that problem. Our state mortgage funding agency, the Tennessee Housing Development Authority (THDA) will make you a second mortgage of up to $8,000 that you have to qualify for in addition to your new first mortgage which can give you the cash you need to use for a down payment now. You can buy your house, collect the $8,000 tax credit, and then payoff the second mortgage from THDA. I suspect other states have similar programs.

Question: Will I ever have to pay back any of the $8,000?

Answer: Not in most circumstances, there is one exception however. If the home you buy and claim the tax credit on stops being your principal residence anytime within 36 months (3 years) of the date of purchase you would then be required to repay whatever portion of the credit you had collected.

Question: I noticed the extension provides that existing homeowners can also claim a tax credit if they buy a replacement home anytime after November 6th, 2009. I’ve tried to sell mine and can’t so we rented it. Could I still qualify for the $6,500 credit?

Answer: Yes you can. Existing homeowners do not actually have to sell their current home in order to qualify for their credit. The only requirements are that the house you buy be your new principal residence and that your former residence had been your principal residence for any 5 of the past 8 years.

Please call or email with any more homebuying questions.

Browse all of the homes for sale in the greater Knoxville area at www.KnoxvilleHomeCenter.com

I’m back in Knoxville after attending the annual National Association of Realtors (NAR) Conference and Expo in San Diego, California.

It was a whirlwind trip filled with lots of learning experiences, reconnecting with Realtor friends, and seeing new products to help buyers and sellers.

San Diego is a very beautiful city with a spectacular and waterfront along San Diego Harbor.

San Diego California skyline from Coronado Island

One of the most exciting things I saw at the conference was the official unveiling of NAR’s new consumer website, HouseLogic.

HouseLogic is not a listings website like Realtor.com but rather a consumer resource which NAR intends to make the ‘go to’ site for homeowners and buyers to visit for objective and valuable advice, tips, and pretty much everything you need to know about owning and buying real estate.

You can simply visit the site and search to find whatever you’re looking for; it’s laid out very well and easy to navigate. A second option is to sign up for a free account and be able to find more easily projects and tips customized to your area. You’re completely safe signing up with your email address; the site’s privacy statement assures that none of your contact information will ever be passed on to anyone for any reason without your express consent.

I signed up for a free account and was immediately served up some project ideas to save money on energy costs, preventative maintenance on my heating system, and an article on how to receive up to $1,500 in tax credits for replacing an existing heating and air conditioning system. Pretty good stuff and the price was definitely right, FREE.

For buyers NAR Chief Economist Lawrence Yun had some words about the current market. He said: “said home sales continue to be dominated by lower-priced homes. In fact, NAR data shows nearly 70% of homes sold in September were priced below $250,000.

“The housing market has become much more active at the lower end,” said Yun. “The $8,000 homebuyer tax credit has significantly helped the market and is having its intended impact of stimulating home sales, decreasing high home inventory levels, and helping to stabilize home prices.”

Sales of homes priced below $100,000 are up 22.5% from a year ago. Sales in the upper-end market are still slow, however; homes priced above $500,000 are up only 4% from last year.

Yun projects the homebuyer tax credit will help raise home sales this year by 350,000 to 400,000 among first-time homebuyers—these are buyers who couldn’t have purchased a home without the tax incentive.

“The expansion of the tax credit into 2010 will help raise existing-home sales next year by as much as 15% and increase home prices by 3 to 5%,” he said.

Increased affordability is also helping spur lower end home sales. In September, the national median existing home price was $174,900, down 8.5% from one year ago.

So do yourself a favor, pay a visit to HouseLogic and see what it has to offer you. Better yet sign up for a free account and let the site find things relevant to your needs and get a monthly newsletter (optional) filled with timely information.

Buyers and sellers are also invited to visit KnoxvilleHomeCenter.com to see all the Knoxville area homes for sale as well as find buying and selling tips, schools information, local jobs, recreational opportunities, and lots more Knoxville information.

Please feel free to comment or ask a question either here or email me

Below is a photo of the Hotel del Coronado on Coronado Island. This spectacular beachfront hotel is on the National Register of Historic Places and has visited by many famous people.

Eleven U.S. Presidents have visited The Del, starting with Benjamin Harrison in 1891. One of the resort’s most famous visitors was England’s Prince of Wales in 1920. He would later become King Edward VIII, only to give up his throne in 1936 to marry Coronado divorcee Wallis Spencer Simpson. Many have speculated that they may have first met at The Del.

The Del has played host to some of America’s greats, including Thomas Edison, L. Frank Baum and Babe Ruth. Famed aviator Charles Lindbergh was honored at The Del in 1927 after his successful trans-Atlantic flight. At this lavish banquet, a replica of Lindbergh’s “Spirit of St. Louis” circled the enormous Crown Room ceiling.

Hollywood has been making movies at The Del since 1901. In 1958, The Del was the backdrop for the comedy classic “Some Like It Hot,” starring Marilyn Monroe, Tony Curtis and Jack Lemmon. The resort has also seen a steady stream of celebrity visitors – from Charlie Chaplin and Humphrey Bogart to Brad Pitt and Madonna. None of them were there during my visit.

Hotel del Coronado on Coronado Island, California

Related articles by Zemanta

• Home Prices Wil Rise 4% In 2010, Say Realtors (huffingtonpost.com)
• Survey shows spike in 1st-time homebuyers (msnbc.msn.com)
• How Did the New Home Buyer Tax Credit Affect Housing Sales? (homeloans.org)
• Strong Rebound Seen for Home Sales (abcnews.go.com)
• Experts: Extended tax credit to boost local housing recovery (seattlepi.com)

This spectacular log home sets amid 6.9 tabletop level acres in a beautiful area of the Cumberland Plateau. $355,000

Congress passed a bill extending the current $8,000 tax credit for persons buying a home who have not owned one in the past three years that was their principal residents. President Obama signed it this past Friday, November 6th, so it’s now official.

But the new bill has an addition for current Knoxville, TN homeowners who want to sell their current home and buy another. If you own your home now, sell it and buy another before April 30th of 2010 you probably qualify for a $6,500 tax credit like the ones buyers have enjoyed this year. ($3250 if you’re married and file separately).

As long as you have a sales contract dated April 30, 2010, you have up to 60 days past that date to get the newly purchased home closed.

The new extension also increased the income limits for all home-buyers. Single buyers can earn up to $125,000 and married couples can earn as much as $225,000.

Before there was no limitation on the cost of your new home; it’s now a maximum sales price of $800,000. I suppose the rationale for this is that the former income limits of $75,000 for a single taxpayer and $150,000 for married buyers was a self limiting mechanism that did not need to be spelled out. Now that selling an existing home enters into the mix with the potential for equity from selling an existing home, I guess Congress felt they needed some sort of purchase price cap.

The income limits were increased in hopes the new higher ceilings will stimulate the purchase of more expensive home. Before the existing tax credit was mostly driving the sales of lower end homes priced at $150,000 and below. With the income limits now increased and current homeowners allowed to participate too that should raise the average sales price of Knoxville and Farragut homes bought with this program.

To cut down on some fraudulent tax returns submitted by taxpayers who did not qualify for the tax credit buyers now have to submit some documentation as proof you actually bought a home and that you qualify for the credit. I believe a copy of your HUD 1 form (closing statement) would qualify as proof but you should check with the IRS or your tax preparer to make sure.

Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns claiming the credit for homes they had not yet purchased. George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.

He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old.

“Some of our findings, while preliminary, are somewhat disturbing,” George said. Among the most striking instances of fraud include 4-year-olds, non-U.S. citizens and IRS employees inappropriately claiming the benefit, he said.

Below is a chart from the National Association of REALTORS® comparing the new tax credit extension to the current one and spelling out the terms and conditions.

Comparison chart showing the existing bill compared to the new, extended version.

So if you’ve been sitting on the fence waiting to buy or, if you couldn’t qualify because of needing some cash for closing costs, this new law levels the playing field for both new buyers and current homeowners who want to sell and buy.

www.KnoxvilleHomeCenter.com is a great place to get started looking at Knoxville and Farragut TN homes and listings for sale. Updated daily and NO REGISTRATION required to search to your heart’s content.

I would be delighted to help you get your current home sold and then buy another either in the Knoxville area or I can refer you to another top notch REALTOR in the city you’re moving to.

Please call or email with any questions about the tax credit or any buying and selling questions.

Knoxville, TN real estate sales and listings

Related articles by Zemanta

• Congress hears of home buyer tax-credit fraud (sfgate.com)
• Mortgage tax credit fraud by illegal aliens? Shhhhh… (michellemalkin.com)
• Homebuyer Tax Credit Scrutinized (time.com)
• $10 billion paid out in home buyer claims, but how many were bogus? (dontmesswithtaxes.typepad.com)
• Home-Buyer Credit Spurs Cost Worry (online.wsj.com)
• First-time homebuyers tax credit: Should Congress end it or extend it? (dailyfinance.com)

7412 Harvest Creek Lane, Powell, TN 37849

It appears the malaise in the Knoxville area real estate market continues this week as it has for the past weeks in 2009.

The Knox County Register of Deeds office reports 170 real estate transfers for the past week, a touch above the average 150 per week we’ve had all year but well below the 200 mark only reached three times in 2009.

Knoxville area real estate transfers for the past week.

John Walsh, the President of Data Quick had this to say about the ‘national’ real estate market: “This market may be closer to normal than it was a a half year ago, but it’s still out of kilter, fueled in large part by incentives and the processing of distressed properties. The sales mix is still lopsided, tilting toward the low end, and lending institutions are only making really safe mortgage loans. For those who can buy, there are some very attractive opportunities. But it still looks like a lot of normal supply-and-demand activity has been put on hold until the economy comes back.”

And Mr. Walsh’s conclusions support what the Knoxville area area has been doing all this year. The majority of sales have been in the $100,000 to $150,000 week in and week out while the higher end ($500,000 and up) has been largely stagnant. Knoxville’s current median price for a 3 bedroom home is $139,900 which is down from $159,900 a couple of years ago.

Based on the most current sales data available from the Knoxville Area Association of Realtors here’s a recap of the local market for the past 5 years.

Year to date Knoxville TN area sales compared to past years

I’m going to be very interested to see if that 60 home ‘spike’ this past September continues on into October when those figures come out. Historically the Knoxville real estate market has been in a seasonal decline by now but as the chart shows, 2009 is holding up past the downturn points. I believe most, if not all of this modest strength is due to the $8,000 tax credit buyers that have not owned a home in the past 3 years can qualify for if they buy a new or resale home.

It’s almost a sure thing now that Congress is not only going to extend the $8,000 tax credit for new home buyers who meet the income restrictions but also make it applicable to existing home buyers in some fashion.

The most likely bill to pass calls for the inclusion of a $6,500 credit for current homeowners who sell their existing home they have occupied for at least the past 5 years and then buy a new one. This pending bill is set to expire next April and sales contracts signed by that date would then have an additional 60 days to close. Final action should happen sometime this month. I’ll be following these bills closely as they make their way through Congress and keep you posted.

Buyers should visit www.KnoxvilleHomecenter.com to see all of the Knoxville and Farragut Tennessee area Realtor listings and contact me to see your favorites.

knoxville tn real estate listings

Related articles by Zemanta

• First-Time Home Buyer Tax Credit Gets Obama Nod (usnews.com)
• Surprising fall in new-home sales (sfgate.com)
• Economic growth expected, but can it be sustained? (sfgate.com)
• Is the Housing Recovery Real? (webvirtualhouse.com)
• New home sales take surprise tumble (msnbc.msn.com)
• Lawmakers Haggle Over Extending Homebuyer Tax Credit (blogs.wsj.com)

* NOTE * As of November 1 Congress has not yet officially extended this tax credit; it is still set to expire at the end of this month (November). However confidence is high that it will be extended in some form and probably expanded.

“Senate Dems on Board with Credit Extension
Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.

Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)”

KnoxvilleHomeCenter.com is the ‘go to’ place to see all Knoxville, TN area listings for sale.

Last week’s results from the Knox County Register of Deeds is now available. It appears the past weeks transactions were a bit below our typical weekly average this year of around 150 closed transactions.

Weekly real estate transactions report from the Knox County Register of Deeds

As we’ve seen in previous reports, the median price for a typical 3 bedroom house was $139,900 for the 3rd quarter of 2009. That price point, $100,000 to $150,000 was overwhelmingly the top selling price last week as it has been for most of the year.

Below is www.Trulia.com’s market view of  Knoxville, TN

In September we did see total monthly sales showing a 7% increase (about 60 more homes sold) over the same time period in September of 2008. But taken in context of the past 5 years, that increase really tells us nothing and is far too little data to base any trend on.

Here’s popular website Trulia’s summary of the Knoxville TN area real estate market.

“Average price per square foot for Knoxville TN was $99, a decrease of 10% compared to the same period last year. The median sales price for homes in Knoxville TN for Jul 09 to Sep 09 was $136,200 based on 1,598 home sales. Compared to the same period one year ago, the median home sales price decreased 4.1%, or $5,800, and the number of home sales decreased 27.7%.

Related articles by Zemanta

• Everybody Thinks the Real Estate Market has Recovered (movephilly.blogspot.com)
• SF Fed chief sees housing stabilization (lansner.freedomblogging.com)

This past week had an average for the year number of real estate transfers with 157 recorded.

Knoxville & Farragut TN Real Estate Transfers recorded last week

No sales recorded for properties priced over a million dollars, 3 between $500,000 and a million, and the highest number was the price point between $100,000 to $150,000. No surprises there since the Knoxville area median price for a 3 bedroom home is currently $139,900.

As I recently reported, sales in the Knoxville area seem to be holding up past the traditional seasonal slowdown times. Typically we see sales numbers start to trend downward after July-August and continue downward until the first part of the follow year when they historically have started a climb back to late spring and summer peak sales times. Looks like from the sales figures this year may be a little different.

Knoxville area year to date sales

You will notice on the graph above, sales have been hovering just around a thousand sales a month since June. Normally by this time August and September numbers would be much lower.

I’m guessing that the $8,000 tax credit is driving a very significant portion of those later year sales. Whatever the reason it’s good news for home sellers and buyers as well as Knoxville’s real estate community.

There’s currently lots of talk about extending that tax credit until next year. Your guess is as good as mine as to what’s going to happen there. Congress did vote to extend it until November 2010 for military personnel that have served at least 90 days outside the Continental US at any time during 2009.

Find information on all the listings still for sale in the greater Knoxville area at the usual spot: www.KnoxvilleHomeCenter.com Please call or comment with any questions or concerns.

Related articles by Zemanta

• Democrats working to extend homebuyer credit (seattlepi.com)
• Could Home Prices See A Double-Dip? (webvirtualhouse.com)
• Top 10 Cities for Reduced-Price Listings (usnews.com)