Brooklyn Park, Brooklyn Center, & Minneapolis Area Real Estate Info

Brooklyn Park, Brooklyn Center, & Minneapolis Area Real Estate Info
Also the basics on American Recovery and Reinvestment Act of 2009

Public Affairs

Brooklyn Center
The city will soon launch three new housing programs for qualified first time homebuyers who purchase foreclosed, vacant properties in Brooklyn Center. Properties must have been foreclosed, registered as vacant with the city, and meet maintenance standards are eligible for these programs. The programs should be available in March. Visit the City of Brooklyn Center for much more detailed information.

Source: City of Brooklyn Center

Brooklyn Park
The city will conduct its annual Real Estate Forum this Thursday, February 26, from 8:30 a.m. to 12:30 p.m. at Edinburgh USA Clubhouse. The cost is $30. Four CE real estate credits are included. | REGISTER

Source: City of Brooklyn Park

Minneapolis
Minneapolis has a relatively new rental licensing ordinance and has just enacted stricter procedures for obtaining a rental license. In a nutshell, when there is a change in ownership, the buyer will need to complete all the RR items before applying for a rental license, or show that the seller completed the RRs. Either the COA (certificate of approval, for sellers) or the COC (certificate of completion, for buyers) must be attached to the rental license application (for properties requiring a TISH).

Properties sold without a TISH will not be able to get a rental license until a TISH report is done and the RRs are completed. So it is very important that agents make sure that the TISH is done before the sale. In other words, they just need to follow the rules. | MORE

Source: City of Minneapolis

First-Time Home Buyer Tax Credit and More
A modified first-time homebuyer tax credit is now law. The credit is for up to $8,000, for principal residences, first-time home buyers, and no repayment if the property is purchased after January 1, 2009 and before December 1, 2009. Information about the home buyer tax credit and the Homeowner Affordability and Stability Plan announced by the President last week are found at NAR's Unlock America's Economy page.

* American Recovery and Reinvestment Act of 2009 *


What's in the stimulus package? Here are the provisions in the American Recovery and Reinvestment Act, signed into law by President Barack Obama:

Home buyer tax credit: increased to $8,000 and repayment requirement eliminated
Conforming and FHA loan limits: last year's high-cost limits of $729,750 restored
Neighborhood stabilization: $2 billion in new funds authorized
Commercial real estate: tax credits allocated for business investment, green building, and energy efficiency
Rural housing development: $500 million in funds authorized
Low-income rental housing: Treasury grants authorized
Tax-exempt housing bonds: tax rules eased
Energy efficiency: grants and credits authorized
Transportation: $47 billion in infrastructure development and rehabilitation funds authorized
Broadband: $7 billion authorized to expand and upgrade infrastructure.
Big concepts:


Government Sponsored Enterprises (GSEs) Refinancing for Up to 4 to 5 Million Responsible Homeowners with GSE loans to Make Their Mortgages More Affordable


A $75 Billion Homeowner Stability Initiative to Reach Up to 3 to 4 Million At-Risk Homeowners


Supporting Low Mortgage Rates By Strengthening Confidence in Fannie Mae and Freddie Mac
Source: National Association of REALTORS®

Weekly Market Report

Click Here To See Full Report
One. That's the number of times over the last 33 weeks that we've had fewer pending sales this year than we did a year ago. And the week in question was Thanksgiving—a week where making an offer on a home is typically ignored in favor of turkey and afternoon naps during another loss by the Detroit Lions.

The buying party continued for the week ending February 14, as there were 731 pending sales in the Twin Cities—up 17.1 percent. Over the last three months, there have been almost 1,200 more pending sales than there were last year. During this time period, 60.3 percent of sales were lender-mediated foreclosures or short sales.

Increased sales means increased absorption of inventory means less houses for sale. There are approximately 4,000 fewer houses for sale right now than there were at this time last year, a drop of nearly 14 percent. New listings remain sluggish as well. The most recent reporting week saw a 9.5 percent year-over-year drop.

The Monthly Skinny - February 09

American Recovery and Reinvestment Act of 2009 Offers Good News for Home Buyers and Homeowners

American Recovery and Reinvestment Act of 2009 Offers Good News for Home Buyers and Homeowners
The new $787 billion American Recovery and Reinvestment Act of 2009 will help home buyers, as well as homeowners. The following is a summary of the bill’s positive housing provisions:

Home Buyer Tax Credit—Under the bill, first-time home buyers can receive a tax credit for 10 percent of the value of a home, up to $8,000, which is a great incentive to purchase a home. The tax credit applies to first-time buyers (i.e., consumers who haven’t been a homeowner in the past three years) who purchase a home from Jan. 1, 2009 to Dec. 1, 2009. Buyers don’t need to repay the tax credit unless they sell their home within three years. The credit begins phasing out for couples with incomes above $150,000 and individuals with incomes above $75,000. To obtain the credit, buyers claim it on their tax return, which will reduce their income tax liability. According to the National Association of REALTORS®, this tax credit should result in an increase of 300,000 home sales for first-time buyers in 2009 and also will boost trade-up purchases.

FHA, Fannie Mae, and Freddie Mac Loan Limits—The bill reinstates higher loan limits for FHA, Fannie Mae, and Freddie Mac that were first introduced in 2008, making loans more affordable for consumers no matter where they live. The limits are equal to the greater of 125 percent of the 2008 local area median home price or $271,050 for FHA, and $417,000 for Fannie Mae and Freddie Mac with an overall maximum limit of $729,750. These limits will expire on Dec. 31, 2009. These higher loan limits give consumers more options: More people will be able to lock-in lower interest rates to purchase a home and more people will be able to refinance at a lower rate.

Neighborhood Stabilization—An additional $2 billion in funding for the Neighborhood Stabilization Program will enable local governments to purchase, manage, and repair foreclosed and abandoned properties and sell them to home buyers at affordable prices. This provision is designed to protect communities across the country, reduce inventory, and preserve home values from further decline.

Low-Income Housing Grants—The bill allows states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing.

Tax-Exempt Housing Bonds—Tax-exempt interest earned on specified state and local housing bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax.

Energy-Efficient Housing—The bill promotes green jobs and energy independence and invests in efforts to make homes and buildings more energy efficient. Through 2010, homeowners will be able to claim a 30 percent tax credit (up from 10 percent) for purchases of new energy-efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners, and water heaters. Additional funding also will be provided for weatherization assistance for low-income households and to modernize the country’s electricity grid and install smart meters on homes that will save consumers money.

The National Association of REALTORS® predicts that the first-time home buyer tax credit, subsequent trade-up buying, higher loan limits, and historically low mortgage interest rates could result in an increase of 850,000 home sales in 2009. The association also expects that the country’s 75 million homeowners will benefit because home prices will stabilize possibly in the latter part of the year, which is much sooner than originally predicted by economists.

A marketing flier for consumers about the Recovery and Reinvestment Act is posted on Coldwell Banker Burnet’s Web site CBBurnet.com. Look for the rotating banner ads on the right side of the home page and click on the banner entitled “$8,000 Home Buyer Tax Credit.”

Coldwell Banker Burnet - Hot Wire

Some states embrace housing plan, others skeptical

Some states embrace housing plan, others skeptical

Obama's $275 billion program would allow borrowers facing foreclosure to get their payments reduced through modifications.
Monday, February 23, 2009
WASHINGTON (Reuters) - While some governors were embracing the housing plan President Barack Obama announced last week, as a way to bolster their own assistance efforts, others worried that the plan is unfair.

"We are very anxious to see the loan modification program that the president is proposing as we think it will mesh very closely," New Jersey Governor Jon Corzine, a Democrat, said at a National Governors Association meeting on Sunday.

His state has developed a program to help distressed home owners in an "aggressive mediation approach" where borrowers and lenders take a court-ordered break to renegotiate mortgages. Corzine said he hoped the plan could "leverage off the dollars" provided in Obama's plan.

Obama's $275 billion program would allow borrowers facing foreclosure to get their payments reduced through modifications jointly paid for by lenders and the U.S. Treasury. It would also help those who cannot qualify for conventional refinancing because their home values have dropped, to refinance through Fannie Mae and Freddie Mac.

North Carolina Governor Bev Perdue, also a Democrat, said her state's program could be integrated with any federal action, as well.

While Washington state has also established a mediation program, said Governor Chris Gregoire, it has only been able to give it a "small amount of money."

"We desperately need this federal solution," she said.

But South Carolina Governor Mark Sanford, a Republican who has also opposed Obama's economic recovery plans, said he had reservations.

"If you look at the number of performing loans versus non-performing loans ... the overwhelming bulk of folks across this country ... are in fact paying down their mortgages," he said. "There's a real equity question as to when the folks who have been playing by the rules ... have the person across the street bailed out."

Sanford also said he did not think a judge rewriting mortgage contracts was in the spirit of American laws and he was not happy with how the plan would be carried out.

"There's something fundamentally flawed about going back to Fannie and Freddie, two of the biggest perpetrators of what went wrong with the housing market, to be two of the key instruments in, quote, solving the mortgage crisis," he said.

Federal agencies charged with implementing the plan hope to have it in place by March 4.

Home Sales are Brisk...with a Caveat

Home Sales are Brisk...with a Caveat

We released our monthly stats news release last week. Here's what we said:

Low mortgage rates and an ample supply of affordable properties kept January home sales strong despite a month of harsh weather.

Pending sales during the month posted a figure of 2,827, an increase of 10.3 percent from last January. This is the eighth consecutive month of year-over-year increase. Closed sales saw an increase of 2.1 percent in January, posting 2,010 units. A growing share of this jump in buyer demand can be found in lender-mediated foreclosures and short sales.

The overall January median sales price of $155,000 is 24.4 percent and a $50,000 lower than last January's mark of $205,000. However, a staggering 59.9 percent of closed sales in January were from the lender-mediated segment, which had a dramatic downward effect on the overall median sales price.

Traditional properties, which exclude foreclosures and short sales, had a January median sales price of $215,000, down 4.3 percent from last year, while lender-mediated homes had a median sales price of $122,000, down 21.4 percent for the same year-over-year comparison.

Housing affordability also tells a tale of two markets. Lender-mediated properties currently have a Housing Affordability Index (HAI) of an astounding 245, while traditional properties have an HAI of 154, a mark last seen in 2004. The overall HAI jumped another 10 points in the last month, and currently sits at 202. This means that the current median family income is 202 percent of what's necessary to qualify for the median-priced home. This is a new record and up 35.6 percent from last year.

Housing supply continues to draw down. There are almost 3,000 fewer houses for sale than there were one year ago, and new listings in January were 15.7 percent lower than in 2008.

Weekly Market Report

Click Here For Full Report
New listings continue their seasonal upward movement, with 1,780 homes for the week ending February 7. This is a 16.2 percent decrease from the same week last year—an ongoing good news trend for an oversupplied market. For the same time period, there were 745 pending sales, an increase of 17.5 percent compared to last year at this time. Sales have increased more steadily than new listings so far this year, which has helped reign in our Months Supply of Inventory to a healthier 7.7 months—down 13.5 percent from last year.

Active listings for sale continue to trail year-over-year numbers. There are currently 25,537 homes for sale, a 12.4 percent decrease from last year. Thankfully, increasing affordability means that a healthier share of these homes should find true romance with a buyer than in previous years.

Great Realty Times Article

Here is a great article from Realy Times

"What's Ahead for Real Estate in 2009
by Denise Lones
2009 will be a year of recovery and stabilization for the real estate industry. Here are my 15 top predictions
for 2009:

1. Mortgage rates will drop, then rise, and finally stabilize
Rates will be at a historical low in the first part of the year.
Rates will go up in early spring.
Rates will level off after the first half of the year.

2. Investors will come back into the market in 2009
The Federal Reserve plans to pump up the housing sector by buying up to $100 billion dollars worth of
bonds issued by Fannie Mae and Freddie Mac.
The Fed will also buy ½ trillion dollars of mortgage-backed securities issued by Fannie Mae, Freddie
Mac, and Ginnie Mae.

3. Buyers will jump off the fence and come back into the market
With fixed rates in the mid-fives -- combined with pricing at 2003 and 2004 levels -- it is an excellent
time to buy. Buyers will finally jump off the fence and back into the market.

4. Sellers will become creative with alternative ways to add value to their home sale with incentives such as:
Interest rate buy-downs
Seller financing
Other incentives

5. Listing Inventory will go down as the market absorbs inventory
Nationally, listing inventory will begin to go down as inventory is consumed by many markets where
new home inventory is on the decline. Builders in 2008 focused on selling existing inventory and did
not focus on building new projects so as the year goes on inventory numbers will decrease. Coupled
with lower interest rates and higher investor confidence, this consumption of inventory will continue.

6. Market time will decline and remain on the lower end of the spectrum
Days-on-market numbers will go .down in 2009 due to a lack of new home inventory coming on the
market.
Realty Times: What's Ahead for Real Estate in 2009 http://realtytimes.com/printrtpages/20090212_ahead.htm
1 of 3 2/13/2009 4:20 PM
With investors and buyers coming back into the market, the days-on-market numbers will level off and
then start to decline in early spring.

7. Real Estate agents will leave the industry in record numbers
Real estate agents that were not prepared for the 2008 market will continue to leave the real estate
industry. Agents that hang in there and focus on great client follow up will be rewarded in 2009.
Agents who remain will go back to basics to exist – then thrive -- in the current market.

8. Builders will use auctions to sell off inventory; many will leave the business entirely
Builders will turn to auctions to liquidate remaining properties.
Builders will leave the industry due to financial pressures from the lack of 2008 sales.
New construction will virtually grind to a halt as builders are unable to develop new product as a result
of excess inventory / poor sales in 2008.

9. New home inventories will reach record low numbers in the fall of 2009
Many builders stopped buying land in 2008, and will therefore be unable to build in 2009.
Builders stopped building in 2008 and concentrated on selling standing inventory. As a result, they
were not building new inventory. This will lead to an inventory shortage in 2009.
Existing new home inventory will be absorbed by the fall of 2009.

10. Consumer confidence will improve in the spring of 2009
Consumer confidence will improve in the spring of 2009, and buyers jump back into the
market…carefully.
Consumers will look to real estate agents for guidance in buying and selling.

11. Appreciation will be small to nonexistent in most markets as the industry stabilizes
Most markets across the country will see little or no appreciation while the market stabilizes and
inventory gets absorbed by the market.
Some markets will continue to see their markets decline into the second half of 2009 as inventory
levels stabilize.

12. The rental market will BOOM IN 2009
It’s estimated that almost 2 million homes will be foreclosed on in 2009. This will transform many
former homeowners into tenants.
Banks will rent their real estate owned properties rather than sell at a substantial loss.
Tighter credit criteria will force potential buyers to renew their current leases after they are turned
down for a mortgage.
Consumer fear and an uncertain employment picture will keep would-be, credit- worthy buyers on the
Realty Times: What's Ahead for Real Estate in 2009 http://realtytimes.com/printrtpages/20090212_ahead.htm
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sidelines, leading to reduced turnover in rental housing.
Americans who have realized a loss by recent homeownership will decide that ownership is not worth
the risk and trouble. They will sign a rental lease and happily return to rental living.

13. "In demand" homes will become the "safe necessity" of 2009
Smaller, green-built, and energy efficient homes will be in big demand.
Home with a good location in relation to work and school will be in demand.
Homes in the mid-range of price for their market will be in demand as more homebuyers become more
frugal.

14. Real estate companies will merge in 2009
Smaller real estate companies will merge with larger companies to make it through the market
downturn.
Competition in the industry will shrink as the number of companies and the numbers of agents is
reduced.

15. Second home markets will see far less activity; many will suffer in 2009
Second home markets in many markets will suffer due to the financial losses owners of second homes
experienced as their stock portfolios, pensions, or other investments devalued and deteriorated.
Second home markets will suffer due to consumers’ need to relocate assets and financial priorities.
While we will see adjustments in 2009, it’s sure to be a much better year than 2008.
Copyright © 2009 Realty Times. All Rights Reserved.
With an award winning staff of writers providing up to the minute real estate news and advice, thousands of REALTORS® in North America reporting daily market conditions, and a
nationally broadcast television news program, Realty Times is the one-stop shop for real estate information. That's why over 10,000 real estate professionals have turned to us for their
publicity needs.
Realty Times: What's Ahead for Real Estate in 2009 http://realtytimes.com/printrtpages/20090212_ahead.htm
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2009 $8,000 Tax Credit Information

2009 $8,000 Tax Credit Information
Click Below To See Full Picture

Real Estate / Larry Baer and the Future of Interest Rates

Interesting Comments from Larry Baer.



Commentary: President Obama will officially sign into law one of the largest pieces of legislation in American history at approximately 1:00 p.m. Mountain Standard Time. (The signing ceremony will be conducted in Denver, Colorado – the place Mr. Obama officially accepted his party’s presidential nomination.) The economic stimulus package, a $787 billion assortment of tax breaks and government spending, is designed to re-ignite the engines of economic growth in the United States.

While the impact may not be immediate, this event will likely mark the beginning of the end of the dramatic move to lower mortgage interest rates that began in August of last year. I am not suggesting that mortgage interest rates will soon begin touching double digit levels – but I do want you to be aware that the prospects of a 4.50% 30-year fixed-rate mortgage is rapidly fading from sight.

Consider the following two scenarios: 1) If the Obama administration’s stimulus package works as advertised economic growth will begin to accelerate sooner rather than later, driving up the demand for capital -- which in-turn will push-up interest rates of every description (including mortgage interest rates). 2) On the other hand, should the package fall woefully short of providing the necessary financial stimulus to grease the gears of the economy the government will be forced to borrow more money – or print more money – or create some kind of blend of these two revenue generating activities. In any case – returning to the credit markets to borrow massive amounts of additional capital (beyond the gargantuan sums already outstanding) and/or simply printing up enormous piles of new dollars will do nothing but put more upward pressure on mortgage interest rates.

As in the case with prospective homeowners – there is a limit to the amount of outstanding debt they can have in place beyond which lenders will either demand significantly higher interest rates because of the increased risk of default – or if the lender deems the risk of default to be too large -- the loan request will simply be rejected. While Uncle Sam currently enjoys a reputation as the most creditworthy governmental borrower in the world – there is a point where his sovereign credit score will begin to degenerate significantly and with it his ability to easily access relatively cheap amounts of capital.

Should the government chose to simply print cash instead -- each dollar that runs off of the government printing presses will directly reduce the value of each dollar you have in your billfold or purse. As this erosion of the value of the dollar continues suppliers of goods and servicers will find it necessary to increase their prices to offset the declining purchasing power of each dollar in revenue they generate. As you probably already know, Superman lost all his strength when exposed to kryptonite, and so it is with mortgage investors when they are exposed to rising levels of inflation. As inflation pressures rise -- so do mortgage interest rates.

As I mentioned earlier in this commentary I am not suggesting mortgage interest rates will soon begin touching double digit levels – but I do want you to be aware the prospects for a conforming 4.50% 30-year fixed-rate mortgage being a common sight on investor rate sheets is rapidly fading from the realm of realistic expectations.

White House, Congress Agree on $8,000 Home Buyer Tax Credit

White House, Congress Agree on $8,000 Home Buyer Tax Credit
The White House and Congress agreed to give first-time home buyers a tax credit for 10 percent of the value of a home, up to a maximum of $8,000. The tax credit is part of the $787.2 billion economic stimulus plan, which President Barack Obama is expected to sign early this week. The tax credit was scaled back from an earlier Senate proposal of $15,000.

The tax credit will apply only to first-time home buyers who purchase a home from the start of 2009 to the end of November 2009. The credit begins phasing out for couples with incomes above $150,000 and individuals with incomes above $75,000. Buyers will have to repay the credit if they sell their home within three years.

The National Association of REALTORS® (NAR) estimates that the tax credit will result in an additional 200,000 home sales and enable many new home buyers to enter the market. According to NAR, first-time home buyers purchased 2.2 million homes last year. This represented 41 percent of all U.S. home sales, up from 39 percent in 2007 and 36 percent in 2006.

....from Coldwell Banker Burnet Hot Wire Express

American Recovery and Reinvestment Act of 2009

American Recovery and Reinvestment Act of 2009


H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 - 184. The Senate also passed the bill later that day. The President is expected to sign the bill soon. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.


The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR’s housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.

The bill includes the following provisions:

Homebuyer Tax Credit

FHA, Fannie Mae and Freddie Mac Loan Limits

Neighborhood Stabilization

Commercial Real Estate

Rural Housing Service

Low Income-Housing Grants

Tax Exempt Housing Bonds

Energy Efficient Housing Tax Credits & Grants

Transportation Investments

Broadband Deployment









Homebuyer Tax Credit – The 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.



FHA, Fannie Mae and Freddie Mac Loan Limits -The bill 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.


Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.


Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.


Rural Housing Service

Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.


Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.


Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.


Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.


Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.


Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.

The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.

These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available.

$7,500 Tax Credit Class and Real Estate Round Table

Admission Is Free

Please come join us this Sunday at 3:00pm in Plymouth for a $7,500 Tax Credit Class

and Real Estate Round Table.

Get all your real estate questions answered in an informal, educational

and non-confruntational setting.

Please Click the Image Below for Full Invitation.

Weekly Market Activity Report

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For the week ending January 31, new listings continue at a lower level than seen last year, clocking in at 1,635—a 15.3 percent drop. Conversely, pending sales continue to raise sand with 673 recorded for this week's report—25 percent above last year. Basically, this is all welcome news. Having fewer listings on the market, combined with an increase in pending sales, helps to reduce the Months Supply of Inventory to 13.5 percent when compared to last year at this time—down from 8.9 to 7.7 months. This means it will take the current supply of houses for sale 7.7 months to sell (on average).

The Percent of Original List Price Received at Sale continues to fall, with the January figure of 89.5 sitting at 1.6 percent less than 2008. It's important to consider sales prices of foreclosure homes and how they affect this figure.

Our new Housing Affordability Index jumped to 202 in February. This is a new record and means that the median family income is 202 percent of what is necessary to qualify for the median-priced home. Again, we must consider how the sales prices in the lender-mediated market are affecting this figure, but we can say with some confidence that there are a number of very attractive buying opportunities in the local housing market. If we are able to maintain these trends, we'll be well on our way to killing the blues. And to this current market malaise, we'll be singing "gone, gone, gone (done moved on)."

$15,000 Home Buyer Tax Credit Proposal Moves Through Senate

$15,000 Home Buyer Tax Credit Proposal Moves Through Senate
The U.S. Senate recently approved a proposal that would give home buyers a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Georgia Sen. Johnny Isakson, a former REALTOR, introduced the new tax credit as an addition to President Barack Obama’s economic stimulus package. Congress is expected to vote on the stimulus package this week, and it’s unclear which provisions will remain in the final bill.

Under the proposal, buyers would get 10 percent of the purchase price of any home, up to $15,000, applied to their tax bill. Anyone who buys a home within a year of the bill’s signature would qualify for the tax credit, and buyers would be allowed to spread out the credit over two years, if they wish. To deter speculators, buyers must occupy the house as their main residence for at least two years.

A tax break passed by the legislature last summer provides up to a $7,500 tax break to home buyers. However, that tax break is only for first-time home buyers and it must be repaid over 15 years. The National Association of REALTORS is currently lobbying Congress to offer this credit to all home buyers and to eliminate the repayment provision.

Real estate industry spokespeople are praising the proposed tax credit as an excellent way to improve the housing market and the economy. Steve Murray, publisher of the national real estate publication Real Trends, said, “Senator Isakson knows the housing industry better than any member of Congress, and this action is exactly the kind of directed action that will have an immediate positive stimulus on the economy. The sooner this amendment gets passed, the sooner the housing market will begin to show further signs of life.”

Weekly Market Report

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As we celebrate Groundhog Day, new listing numbers continue consistently at a slower pace than 2008. New listings for the week ending January 24 were 10.3 percent less than this same week last year. Total active listings are significantly down, reflecting the steady decline of supply that occurred over the previous 12 months. There are currently 24,993 active listings on the market, down about 11 percent and 3,000 units since this time last year.
There is additional good news. Pending sales are showing an increase of 8.1 percent compared to one year ago. It should be noted, however, that much of this increase is foreclosures and short sales.
The Supply-Demand Ratio (SDR) for February is projected to be 7.67, painting a picture of falling supply in further detail. The SDR reflects the number of homes for sale per buyer in the Twin Cities.
These positive signs are methodically leading us on a journey toward a healthier regional real estate market and not on an endless repeat of sameness like in the movie named for today's holiday.

$7,500 Real Estate Tax Credit Information

Putting "panic" in perspective 2

Putting "panic" in perspective 1