The Stars Are Aligned

Most first-time buyers would agree that the $8,000 tax credit they will receive within the year after their purchase is a great bonus and incentive to purchase now. Especially since as of this year they don't need to pay it back. But a lot of buyers are still having a tough time scrounging up down payment funds. So what if you could get your $8,000 credit before you closed on your house to use any way you saw fit?!

This is where the new housing Tax Credit Advance Loan Program steps in. The Legislature recently passed the state budget with a provision authorizing the State Treasurer to invest $25 million in the program. There are still details to be worked out, but the program would allow first-time home buyers to utilize the tax credit as down payment when closing the sale of their first home. Whoohooo! This is excellent news for anyone who may have previously been on the fence as whether to take the plunge and invest in the market now. Especially with interest rates still as low as they are.

So hopefully within about a month this program will be fully instated for buyers to capitalize on.

New Greenwood Listing

Check out my lastest listing in Greenwood at 510 N 80th Street! Offered at $437,000, this charming Craftsman boasts 4 bedrooms, 1.75 baths, and has been completely updated inside and out. New plumbing, electrical, gas furnace, insulation, modern kitchen with granite countertops, stainless steel appliances - you name it, it's been cared for and redone.

And to top it off, it's in a great central location, 10 minutes from Downtown and 6 blocks from GreenLake. As a personal resident of Greenwood, I know this neighborhood very well, and truly love all the shops, restaurants, and numerous amenities this community has to offer. And I know you will too!

If you're free on Sunday afternoon stop by my Open House from 1 to 4pm.

What Can the Economic Stimulus Plan Do for You?!

It seems like there's so much talk about the Obama's recently enacted economic stimulus plan these days, but a lot of buyers and home owners aren't really aware of how it will benefit them. So here are four key benefits that you should be aware of:

Benefit #1 – Expansion of Home Improvement Tax Credit. The tax credit for making energy efficient home improvements is now 30 percent of the cost of the improvements up to a maximum of $1,500. Previously, homeowners could get a tax credit worth just 10 percent of an upgrade cost and the credit was capped at $500. Eligible improvements include energy efficient exterior doors and windows, roofs, insulation, heating and air conditioning systems and hot water heaters. In general the improvements must pass the International Energy Conservation Code or qualify for an Energy Star rating. The stimulus also lifts tax credit caps for certain alternative-energy improvements for businesses and individuals. Under the new law, owners may claim a 30 percent tax credit for qualified solar water heating systems, small wind energy systems and geothermal heat pumps.

Benefit #2 – Expansion of First-time Home Buyer Tax CreditThe tax credit available to first time home buyers was increased from $7,500 to $8,000 for homes purchased between Jan. 1, 2009, and Dec. 1, 2009. Also, the credit no longer needs to be paid back as long as the buyers live in the home without selling it for at least three years. The previous version of the credit required home buyers to pay the funds back over a 15 year time frame, making it an interest free government loan. The income limits are unchanged from the previous version ($75,000 for single tax payers claiming the full credit and $150,000 for married tax payers), as are most other qualification requirements. Also, the credit remains refundable. The credit may be claimed on 2008 tax returns that are filed by April 15 of this year, even if the home is purchased in 2009, according to CMPS. One catch: if you bought the home in 2008, the credit remains $7,500, and still needs to be paid back over a 15 year timeframe beginning in 2011 when you file returns for 2010.

Benefit #3 – Higher Reverse Mortgage Loan LimitsLoan limits on Home Equity Conversion Mortgage (HECM) - or "reverse mortgage" loans - will rise to $625,500 until the end of 2009. Current limits, which mirror conforming loan limits, will be raised to open up reverse mortgage options for many seniors who may want to rely on home equity as a stable source of income.
Loan limits for FHA-insured reverse mortgages are increased to the $625,000 level nationwide, not just the higher cost areas. The previous limit was $417,000 across the country. CMPS officials (an organization that certifies mortgage bankers and brokers) called this "especially important because the FHA program is virtually the only game in town as private and jumbo reverse mortgage programs have nearly all evaporated." This increased limit coincides with another little-known change in the reverse mortgage arena: the availability of reverse mortgages on home purchase transactions. "This is a fantastic opportunity for senior citizens to buy a new home and be relieved of mortgage payments without having to wait for their old home to sell," said Gibran Nicholas, chairman of the CMPS Institute. He suggested seniors could also use this strategy to buy a new home and turn the old home into a rental or otherwise wait for market conditions to improve before trying to sell the old home.”

Benefit #4 – $729,750 FHA and Conforming Loan Limits Restored in High Cost Areas"The $729,750 maximum loan limit had been in force throughout 2008, but was reduced to $625,500 in 2009," Nicholas said. "The economic stimulus plan restores the $729,750 maximum in high-cost areas (King County is $567,500)." This makes higher cost homes more affordable – especially in the coastal housing markets that tend to have above-average home values. Now, residents in these areas will benefit from FHA’s lower rates and easier qualification standards. The bill also provides the option, if warranted, to increase loan limits for any "sub-area," i.e. an area smaller than a county. These limits will expire December 31, 2009.

Throw Me a Bone!

About a month ago I received a notice from the King County assessor informing me that my home had been assessed for $40,000 more than it was valued at last year. And of course I'm thinking, that's fine and dandy, but it also means that my property tax bill is gonna be that much higher next year...Guess I know where my stimulus package is going.

Currently in Seattle, it seems as though taxes are going up much faster than home values, which is causing a great deal of financial stress for many people in the area. The Seattle Times recently reported on a couple, Pamela and Michael Nugent, whose Renton home assessment jumped 43% from last year, while home prices in their area dropped 9%. Like many other retirees on a fixed income they are uncertain as to how they are going to make ends meat as taxes continue to increase.

If home valuations keep rising as they are, the foreclosure rate in our state could rise even higher, as people are unable to pay their taxes and forced out of their homes. It's a scarey thought. And it begs the question -- how can assessed values go up in a declining market? Well, according to the Seattle Times article, by Keith Ervin, it's because the 2008 valuations represent home values as of Jan. 1, 2008. That value was calculated by looking at prices paid for nearby properties over the prior 3 years, which won't reflect falling prices this year. Hmmm...so by that account, we won't see any tax relief for a long time down the line. Does this seem highly unfair to anyone else?!

King county home owners do have the option to appeal their tax assessments, but all appeals must be submitted within 60 days of when your home valuation was mailed to you. And even then, there's no guarantee that your appeal will be granted.

If you have questions about the assessed value of your home you can call the King County Assessor at (206) 296-7300 or go online: www.metrokc.gov/Assessor/

Into the Sunset

Along with some other quintessential Ballard landmarks, such as the Denny's on 15th, the much loved Sunset Bowl is no more.

Apartment developer Avalon Bay Communities bought the bowling alley, at 1420 Northwest Market St., in January and closed it in April. The developer plans to erect a six-story building with 230 apartments above 15,000 square feet of retail space along the street and parking for 280 cars underground.

While I think that new apartments and affordable housing will be a huge welcome to the Ballard area (considering the bulk of development is towards condos or new mega-homes), I also wonder if there will be ample community gathering spots to accommodate this new influx of people. I mean how many bars and restaurants can you have before they all kind of meld together? If you ask me, we should be adding more bowling alleys, parks, p-patches, skate parks, and other unique establishments to the community to give it more vitality.

If you are interested, this Monday, July 28 at 8pm, the developer is scheduled to present information about this site and project at an early design guidance meeting in the library of Ballard High School at 1418 NW 65th St.

The Times They Are a Changin'

Some important changes were announced by the NWMLS (Northwest Multiple Listing Service) regarding the way the public can view property listings on the web starting this month. The term Active STI (Subject to Inspection) will no longer be used. It will become Pending Inspection, and two new statuses will be created, Pending Feasibility and Pending BU Requested.

Pending Inspection will be used when the property has a signed Purchase and Sale Agreement and has an inspection scheduled. Pending Feasibility will be used for listings where a purchase and sale agreement is signed pending a feasibility study. Pending BU Requested will be used when the seller would like to receive back up offers.

So this means that homes with pending offers that previously remained visible on listing sites with the status of “Subject to Inspection” will now be taken completely off the market and all listing sites, and will not be visible to the public. If the deal falls through, they will then go back on the market.

Another important change is the inclusion of CDOM (cumulative days on the market) that will be available for display on all listing sites. Previously, if a listing was taken off the market and re-listed, the “days on market” number shared by the NWMLS with public listing sites was reset to zero, while the internal NWMLS database maintained a private CDOM that indicated the true total time a home had sat on the market. Additionally, the price history for listings will also be available, so you will be able to check the original list price and any price reductions that may have occurred on a property.

All in all, the access to this new information will greatly benefit the public and allow them to better educate themselves on the market and their real estate decisions.

Where Do The Candidates Stand on Housing?

Now that we finally have a Democratic nominee (Sen. Barack Obama) and Republican nominee (Sen. John McCain) after what seems like years of campaigning, it's prudent to ask what each candidates stance is on the housing market and related economic issues. So here's a breakdown of their initial positions on these topics:

Obama:

1. Calls for greater government regulation of the U.S. financial system and proposes a new $30 billion economic stimulus plan to help home owners, including a $10 billion foreclosure prevention fund to help people keep their homes and $10 billion in relief for state and local governments hit hardest by the housing crisis.
2. Outlines six "core principles for reform" that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies.
3. Wants to repeal a provision in the bankruptcy law so ordinary families can modify terms of home mortgages.
4. Proposes a 10 percent mortgage tax credit for middle-class Americans.

McCain:

1. Proposes to spend up to $10 billion to allow some home owners to trade high-interest, adjustable-rate mortgages for fixed-rate loans.
2. Proposes a suspension of the 18.4-cent federal gas tax and 24.4-cent diesel tax during the summer.
3. Supports a middle-class tax cut by doubling the personal tax exemption for dependents to $7,000.
4. Calls for a simpler tax system with two tax rates and a generous standard deduction.
5. Supports making permanent the 2001 and 2003 income tax cuts and proposes cutting the corporate tax rate to 25 percent from 35 percent and allowing businesses to immediately write off capital expenses.
6. Maintains that government assistance to the banking system should focus on preventing systemic risk that would endanger the financial system and the economy.

Source: Reuters News 6/04/08