Tax Credit Expires; Home Sales Dip

Weekly Market Activity Report

Home sales in the Twin Cities housing market took another dip as the hangover from the tax credit expiration continued. For the week ending May 22, there were 624 pending sales, a precipitous drop of 42.5 percent from a year ago.

The biggest drops in sales since the credit ended can be seen in the traditional seller market (i.e., anything that’s not a foreclosure or short sale) and in the middle price ranges from $150,000 to $350,000. Pending sales have dropped in those ranges from 1,085 the week the credit ended to 384 for the week ending May 22. In sum, it may be a difficult summer market for home sellers.

The good news is that new supply is also slowing, which means the market
is already self-correcting to avoid a surge in unneeded inventory. New listings fell to 1,581 for the same reporting week, a decline of 15.8 percent from this time last year.

The Supply-Demand Ratio has been updated for June and shows a figure of 5.05, which means there are 5.05 homes for sale for each buyer in the month. That’s a 10.9 percent increase over the mark seen a year ago and is a result of the decline in buyer activity.

Minneapolis-St. Paul Real Estate Market: May 2010

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Matt Strobl (2010 Treasurer of the Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Foty.
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Minneapolis-St. Paul Real Estate Market: April 2010

Here’s the Monthly Skinny for April 2010, which is produced by the Minneapolis Area Association of REALTORS.

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Brad Fisher (2010 President of the Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Foty.
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12 Things to Know About the Homebuyer Tax Credit

If you’re in the market for a new home and are hoping to take advantage of the tax credit, here’s what you need to know:

  1. To qualify, first-time and repeat buyers must enter into a written binding contract by April 30, 2010 and close by June 30, 2010.
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  2. You qualify as a first-time homebuyer if you (and your spouse, if married) have not owned a primary residence for a 3-year period before your purchase, and you have never taken advantage of the DC first-time homebuyer credit.
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  3. Buyers qualify for the repeat buyer credit if they have lived in their primary residence for five consecutive years of the past eight years. A primary residence is generally regarded as the residence where an individual spends most of his or her time.
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  4. The credit may be applied to primary residences, including detached single-family homes, condos, townhouses, and co-ops.
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  5. The maximum allowable credit for first-time buyers is $8,000. The maximum allowable credit for repeat buyers (also known as long-term residents) is $6,500...
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  6. The tax credit is equal to 10% of the purchase price of your home, up to $8,000 for first-time buyers and up to $6,500 for most other buyers.
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  7. Like all tax credits, it will directly reduce the total amount of taxes you owe.
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  8. The full credit is available for single individuals whose adjusted gross income is less than $125,000. If your adjusted gross income is greater than $125,000 and your home purchase qualifies you for the full credit, the credit phases out by set percentages according to the adjusted gross income above the $125,000. The adjusted gross income for married couples filing jointly is $225,000, with the credit beginning to phase out for amounts higher than the $225,000.
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  9. The purchase price of the home cannot exceed $800,000.
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  10. There is a mild recapture provision with the program. If you sell your home within three years of purchase, the entire amount of the credit is recaptured (that is, the government takes it back).
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  11. Dependents are not eligible for the credit.
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  12. Purchase documentation must be included with the tax return in order to claim the credit.
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Please contact me if I can assist you with the sale or purchase of a home.

Kate Walsh, Realtor®
Lakes Area Realty
612.220.3309
info@designhouse9.com
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For more information about the tax implications of the credit and your home purchase, please consult a tax professional.

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Minneapolis-St Paul Real Estate Market: March 2010

Here’s the Monthly Skinny for March 2010, which is produced by the Minneapolis Area Association of REALTORS.

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Cari Linn (Secretary of the Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Foty.

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Minneapolis-St Paul Real Estate Market: February 2010

Here’s the Monthly Skinny for February 2010, which is produced by the Minneapolis Area Association of REALTORS.

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Pat Paulson (President-Elect of the Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Foty.



Homebuyers Tax Credit

It’s February and the deadline for the Homebuyers Tax Credit is approaching (April 30, 2010). Qualified first-time homebuyers can receive a credit of up to $8000. Other qualified buyers can receive a credit of up to $6500 for homes purchased between November 7, 2009 and April 30, 2010. Buyers need to enter into a written binding contract by April 30, 2010 to close by June 30, 2010 in order to claim the credit. There are certain conditions that must be met to qualify. Contact me to receive a brochure outlining the conditions and benefits of this tax credit. Either leave a comment (below) or use the ‘Post a Note’ page for more privacy.