Existing Home Sales on the Rise

The National Association of Realtors (NAR) announced that for the first time since September of 2005, existing home sales rose for the second month in a row in May. Existing home sales consist of single-family, town-homes, condos and co-ops. Key factors include the first-time home buyer tax credit, low interest rates and affordable home prices, causing existing home sales to rise in May by 2.4 percent. First-time home buyers continue to bolster the market in May by accounting for 29 percent of home buying transactions.

NAR’s chief economist Lawrence Yun states, “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates. First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.” For May, according to Freddie Mac, 30-year fixed interest mortgage rates were at 4.86 percent, slightly higher than April. However, as of mid June, rates had jumped to 5.38 percent. Congress is looking to expand the first-time home buyer tax credit to either extend the expiration date, increase the deduction amount or possibly open it up to any home-buyer.

Performance in the Northeast region was above average for May at 3.9 percent for existing-home sales with a median price point of $243,600.

Between existing and purposed tax incentives, low mortgage rates and home prices, this could become a buyer’s paradise and finding the right real estate help is essential. Please contact Sean T Shallis at The Shallis Group for a personal consultation on your buying or selling needs at 201-427-1032.

(source: realtor.org)

Tax Credit for Homebuyers Could Expand

Businesses and lawmakers hope to expand the first-time home buyer tax credit.
The first-time home buyer tax credit, which provides first-time buyers with $8000 in tax credits, is set to expire on December 1, 2009. The tax incentive was created as part of the economic stimulus package in an effort to help boost the faltering real estate market with the provision that eligibility runs from January 1, 2009 to December 1, 2009. However, lawmakers and businesses are lobbying to extend the expiration date and expand on the incentives as well.

According to the National Association of Realtors (NAR), 40% of current home purchases are from first-time buyers. Many factors, such as the first-time home buyer tax credit, low mortgage interest rates and declining property values, are contributing to the recent record braking numbers for first-time home buyers. While some are certain that these tax credits will be expanded in an effort to help boost the wavering real estate market, it comes with the price of reducing taxes during a time when the national budget deficit is skyrocketing.

Current Legislative Efforts
Already legislation is being presented in both the Senate and the House in an effort to expand home buyer tax credits. Senator Johnny Isakson (R-GA) proposed a senate bill that would expand the tax credit from $8000 to $15,000 for all home buyers. In the House of Representatives, Rep. Kenny Marchant (R-TX) introduced a bill that would expand the expiration date of the first-time home buyer tax credit from December 1, 2009 to the new date of June 2010. This bill also calls for the expansion of the tax credit to all home buyers not just those that are purchasing for the first-time. Additionally, the bill would also provide $3000 credit to any one who is refinancing. Representative Bernice Johnson (D-TX), also introduced a bill in the House which would extend the expiration date through 2010 and expand the credit to any home buyer.

According to Lawrence Yun, chief economist at the NAR, “It would go a long way toward inducing trade-up buyers into the market.” Trade-up buyers have yet to come back to the market, which is the hope of the purposed legislation.

Between existing and purposed tax incentives, low mortgage rates and home prices, this could become a buyer’s paradise and finding the right real estate help is essential. Please contact Sean T Shallis at The Shallis Group for a personal consultation on your buying or selling needs at 201-427-1032.

(source: usatoday.com)

Favorable Market Conditions

Reasons for the Improvement
The National Association of Realtors (NAR) just released the latest housing market figures, which shows pending home sales up for the third month in a row. This possible trend could be attributed to the first-time homebuyer tax credit that gives up to $8000 in tax credits between January 1, 2009 and December 1, 2009. Another large factor influencing the real estate market is the fact that mortgage interest rates are still at an all time low.


Why NAR Believes These Numbers Will Increase
NAR chief economist Lawrence Yun states, “Housing affordability conditions have been at historic highs, but now the $8000 first-time buyer tax credit is beginning to impact the market. Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.” NAR President Charles McMillan also adds, “Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment.” This is a great help to homebuyers that qualify for mortgage loans but come up short on cash.


Pending Home Sales and Affordability Index
In the Northeast, the Pending Home Sales Index rose 32.6% in April as compared to the national average increase of 6.7%. Existing home sales are also on the rise with a 2.9% increase for April nationwide and an 11.6% increase for the Northeast region. The majority of this increased activity primarily lies in the lower range of home prices with mid-priced homes showing some signs of improvement as well. Also setting record figures is the Housing Affordability Index, which analyzes the relationship between home prices, mortgage rates and various income levels. In April, the Housing Affordability Index showed the second highest results on record. Hopefully these conditions will remain long enough for the housing market to return to steady ground.


In the last 10 days, Sean T. Shallis and his group representing Weichert Realtors have successfully negotiated three properties for sale in Hoboken and Jersey City. We are committed to busting the real estate myths in today’s news “Properties aren’t selling…No one is buying!” We are presently marketing numerous properties that will qualify for FHA and or VA financing. Call us immediately at 201-427-1032 to find out how to capitalize on the greatest real estate market in decades!

(source for statistics: NAR)

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