An Unrecognizable Housing Recovery

Normally lower home prices would be good for any housing recovery and good for first time or move up home buyers.

Home sales data indicate an upward tick after 2010, the worst year of sales in a decade. Any momentum however is not coming from the typical homeowner but from cash rich investors who are snapping up foreclosed and distressed properties at bargain prices. Homeowners or first time buyers crucial to sustaining a recognizable housing recovery are not a market force.

While the number of first time homebuyers has declined, all cash deals have increased, accounting for one third of all home sales in January 2011. A record number of foreclosures have continued to depress prices. The median sales price of existing homes in January fell to it's lowest level in 9 years. Lenders are requiring much tighter lending standards and higher down payments from borrowers searching for financing. In most cases the average requirement is 20% down with perfect credit. The inability to find available conventional financing results in fewer buyers shopping for homes and fewer sellers putting existing homes on the market in order to upgrade.

Cash rich investors are only interested in properties at risk of foreclosure or already foreclosed. They can aquire them at bargain basement prices. The average blue collar worker or first time home buyer can't take advantage because they cannot get the credit needed to buy. A major barrier for the first time homebuyer, preventing many from buying even when the median price fell to it's lowest in many years.



A record number of coming foreclosures or "shadow inventory" still loom large over the next 2 years. As prices continue to decline any housing recovery as we know it will also fizzle out. Supported only by cash we may never recognize or look at the real estate market in the same ways we had. Housing may be becoming a cash commodity for those who are willing to play and gamble. Banks obviously are not playing anymore.
George Sinacori
GES Real Estate

Springtime A Great Time To Donate

Spring is historically the busiest time for real estate sales. More homes are sold during the spring season than at any other time of the year.


Homebuyers typically are out in force and sellers spruce up and clean up the clutter in order to attract more buyers dollars. People generally clean out wardrobes, kids rooms, garages and closets anticipating moving. The question I have is what do most people do with all that extra stuff?

Many of us have clothes in excellent condition in closets, drawers and trunks that we rarely, if ever use. Spring may be the best time to clear out some of that good stuff for some good causes.

Consider that 20% of children living in the good old U.S.A. live in poverty. Donating all that extra stuff to some worthwhile charities could make a big difference to some less fortunate family. Donating to those in need can make a difference in the way we feel too. It's important to give back no matter how much or how little we have. There's someone out there that can benefit greatly from a simple act of kindness, consideration and thoughtfulness. Consider that we can give our unused or unwanted treasures new life. Also consider that it will motivate us to clean out some of that clutter that we've been storing for some unknown reason and breath new life into our wardrobes.




Clean out the closets, drawers, trunks, babies stuff, kids rooms, garages and other places that we hide our "remember this shirt" stuff in. Set a plan of attack. Schedule one room a week to ravage and have fun doing it. Donate and feel good. The reward of feeling organized is worth the time. Getting a jump on packing up to move is also a great motivator. Than call and start looking for a house. It will be springtime soon.
 
George Sinacori   be sure to visit Love 2 Play for more.

Homebuyer Tax Credit Causing Chaos

Sept 18, 2009

It seems as though the Federal Homebuyer Tax Credit in 2008 & 2009 did it's job to help boost home sales, although hundreds of thousands who took advantage of the credit are now be told by the IRS that they'll have to give it all back.

In it's typical fashion, the Fed has created confusion, and chaos with misunderstood stipulations, changes mid stream and language that even those who wrote it would be hard pressed to understand.

Over 2.6 million supposedly eligible buyers bought homes and filed for the credit receiving a total of approximately 19 billion dollars in tax breaks. Nearly half of those who received money for the credit on 2009 tax returns will have to return it according to a Federal audit by the U.S. Treasury. Additionally a recording error may cause the IRS to seek repayment from tens of thousands more even though they are entitled to it.

Part of the chaos is a result of Congress enacting 2 different types of credits according to when a homebuyer purchased a home. The rules in 2008 required repayment of the credit up to $7500 over 15 years. A zero interest loan. Congress later changed the program for buyers in 2009 eliminating the repayment requirement, although those who purchased in 2008 are still obligated to repay. (See my blog Homebuyer Tax Credit Changes.)

Confused yet? Don't be it gets better ! Apparently the IRS contributed to the chaos by recording the wrong purchase dates for approximately 73000 homebuyer in 2009, meaning that they will be asked to repay as if they purchased in 2008 under the first version of the bill.

If you purchased a home recently and took advantage of the credit, as many of my own clients did keep good records and have your accountant review the credit requirements with you. There so many variances and stipulations related to this tax credit that I would be all day listing them and in the end listing them in vein. After all the IRS, Treasury and Congress can create confusion whenever and wherever they choose to now can't they?

See my blog on Homebuyer Tax Credit Changes for more on the differences between the credits, purchase dates etc.

George Sinacori

GES Real Estate, LLC

561-306-6736

rebuygeorge@yahoo.com

Foreclosure Trends in Palm Beach County

In today's housing market it's no secret that Florida ranks among the top states in foreclosure activity and in property value decline. After a year of government spending, bailouts and intervention that distinction remains unchanged. Last month Florida received the 2nd highest amount of new foreclosure filings nationally, second only to California. Other than steep declines in home values and drastically reduced sales activity little else has changed in the Florida housing market through 2009. Although the new year promises a (different) housing market, current foreclosure trends indicate that the pace of foreclosure activity will continue.

Information obtained through RealtyTrac shows that foreclosure filings over the past 2 months in Palm Beach County, FL have increased. County wide, home prices have declined since June and apparently remained unchanged since September. RealtyTrac reports that 18,096 homes in Palm Beach County received some form of foreclosure filing. Interestingly the greatest value or savings as indicated by foreclosure sale price to average sale price was in Boca Raton where sales trends indicate an average sale price of $244,300 while average foreclosure sale price was $164,750. A difference of 34-35%.

Changes in the short sale process (selling a property for less than what's owed) now scheduled to become effective April 2010 may help some homeowners. Legislation has already been passed simplifying the short sale process by requiring lenders to make the application process uniform from lender to lender thereby reducing the time involved in closing a short sale and hopefully making them a bit more appealing to a ready, willing and able buyer. Many would be buyers shun short sales due to the lengthy process and lack of response by lenders to short sale requests, although when properly submitted the process does work.

If you or anyone you know are interested in buying or selling a property in South East Florida please call 561-306-6736 or email me for a no obligation discussion of todays foreclosure market and the short sale process.

Homebuyer Tax Credit Changes

Congress has extended and expanded the homebuyer tax credit. The modifications extend through April 30, 2010” and become effective when the President signs the bill. Ideally Dec.01. Changes made to the current credit become effective on that date, as well. Most significantly the time allowed has been extended through April 30, 2010 for contracts and through July for closings. i.e.: A contract after April 30,20010 with a June closing would not be eligible. Income limits have been increased for both single and
married couples and the tax credit is not limited to firsttime homebuyers. A cap on the price of an eligible home will become $800,000. where there previously wasn't any. Following is an outline of these changes as published by the NAR.


Firsttime Buyer –
Amount of Credit $8000 ($4000 married filing separate)
Firsttime Buyer Definition for eligibility: may not have had an interest in a principal residence for 3 years prior to purchase



Current Homeowner –
Amount of Credit $6500 ($3250 married filing separate)


Definition of eligibility - Must have used the home sold or being sold as a principal residence
consecutively for 5 of the previous 8 years



Termination of Credit - Purchases after April 30, 2010
So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.



Income Limits -
(Note: Increased income limits are effective as of date of enactment of bill)
$125,000 – single $225,000 – married
Additional $20,000 phase out



Limitation on Cost of purchased home
$800,000 effective date of enactment



Purchase by a Dependent is ineligible effective the date of enactment.



Antifraud Rule - Purchaser must attach documentation of purchase to tax return.



If you have questions regarding the newly expanded Homebuyer Tax Credit please call or email me directly. George Sinacori 561-306-6736 - rebuygeorge@yahoo.com

The photo above is a 3BR 21/2 bath 2 car garage home in NW Deerfield Beach, FL and is priced in the low $200,000. See this and more great home listings at http://ges-realty.com

Taxpayers $700,000,000,000 Handout

"Wall Street" has never translated to "housing". Try as they may to make them synonymous it isn't so just because someone says it is or want us to believe it. Looking at the players in the current economic debacle, this madcap comedy of errors, I'm reminded how much the Secretary of the Treasury and the Chairman of the Federal Reserve emulate a classic cartoon comic strip of old. Cartoonist Jeff Fisher's characters Mutt and Jeff were business men, almost smart enough to be con men. Mutt was tall and lanky, slightly bent forward while Jeff, his partner, was shorter, a stockier physical makeup and balding with a mustache and beard. I'll give you a moment here to visualize. OK! See any similarity yet? If not here's a link to Mutt and Jeff. Almost uncanny I think.

These two energetic little lunatics were always looking for the easy way to get something. They would attempt the craziest most hair brained schemes and act on them, believing that they couldn't or wouldn't fail. Mutt and Jeff were always surprised to be tossed on their butts, from wherever they were trying to sell their junk by much more sane level headed people.

Our Treasury Secretary and Chairman of the Federal Reserve however have achieved what the fictional Mutt and Jeff only aspired to. They've somehow convinced the most advanced, most sophisticated and supposedly most intelligent government in the world that they need $700,000,000,000. Is that enough zero's? Congress is busy running around convincing each other to vote one way or the other. The House and Senate have each already voted, one no and the other yes to give. What they've forgotten is that the real issue with the economy is still housing. How does Wall Street translate to housing? I just don't get it. A recent First Time Homebuyer tax rebate has not stimulated people to buy houses. A $300,000,000,000 FHA initiative designed to help refinance "troubled mortgages" has done little. Although that was made available only last week I don't see any rush on FHA refinancing. Federal takeovers of both Fannie Mae & Freddie Mac have cost us tens of billions of dollars and still banks and industry giants continue to fail under multi million dollar leadership.

Corporate greed, corruption and politics as usual have put us all on the edge of our seats waiting to see or hear whether or not Mutt & Jeff have made the ultimate score. A taxpayer handout to rescue Wall Street. What happened to rescuing housing? The aforementioned Homebuyer Tax Credit, FHA plan and Corporate bailouts were all initiatives of our Treasury and Fed leaders. These guys weren't thrown out like Mutt & Jeff, they just haven't worked. Hey here's another hair brained scheme. Give them $700B to try to bail out Wall Street. It may not work but heck if you guys are in a giving mood and your pockets keep getting deeper give it up. No guarantees, no need for oversight or regulation, Mutt & Jeff will let you know when it fails. In the meantime Mr. and Mrs. Taxpayer keep watching and keep waiting. Something good may happen someday.

Like the more sane, level headed business minded people that kept throwing Mutt & Jeff out on their backsides, I want to remind everyone of a little word seldom used anymore when it comes to doling out billions of dollars in response to tantrums born of greed and overindulgence.

Just say NO. Say no to the Wall Street power brokers, say no to the corruption, say no to the partisan politics that have lead us to a dark place in our country's history and say No to any more Mutt & Jeff like schemes. Let the corporations and their overpaid CEO's wallow in not being rescued by taxpayers. Let's get the ball back on the court and concentrate efforts on straighten out the housing crisis.

Push the First Time Homebuyer Tax Credit, pressure banks to employ forbearance efforts for troubled borrowers, move forward with the already in place FHA reforms that as of Oct. 1 are available, and let's take a long look at the arbitrary actions of HELOC lenders in capping or eliminating lines of credit in order to accommodate their own selfish greed.

Mutt & Jeff my answer is NO !