King County and Pierce County Real Estate October 2009
By Tyler Freed
November 19, 2009

In King County the number of active listings is down 3.8% from October 2008. More importantly the number of closed homes has increased 29.7% over the last twelve months, at an average closed price of $421,521. New Construction in King County has an average closed price of $517,545 with closings up 19.6%. New construction starts are definitely down from the year, leading to a decrease in active new construction listings of 18.81%.

Pierce County on the other hand has not seen similar prosperity in the new construction market. Active listings are down 10% and closed new construction homes are approximately 1/6th of the King County increase at 3%. New Listings in Pierce County are down 2.9% and closed sales are up 22%. The median sales price in Pierce County is $237,553.

What is the major factor of the increased sales?

There are many factors due to the increase in closed sales in both counties. The major factor that has spiked sales in the last quarter is the original 8K tax credit. The current home buyer tax credit can be as high as $8,000 on the purchase of a home by a first time buyer. The credit allows for 10% of the purchase price, up to $8,000. That credit has been extended and is now good through April 30th, 2010. As long as a contract is signed and closed before July 1, 2010, the buyer can claim the credit. For members of the Armed Forces who have been deployed outside the U.S. for at least 90 days at some point between Dec 31, 2008, and the cut-off date for the credit (May 1, 2010), the dates that end the period where they can claim the credit are extended to May 1 and July 1, 2011.

Another major factor is the 30-Year Fixed-Rate Mortgages. We have never seen average rates like these. The yearly average as of September was 5.08%, with a high of 5.42% in June and a low of 4.81% in April.

This 2009 Market has seen exceptional interest rates, reduced inventory, and government programs that help buyers with tax relief. The agent population is expecting to see more REO properties released in the beginning of 2010. Hopefully these bank owned homes will not decrease the local market values much more than they already have. If rates continue to stay around 5% and move up buyers are motivated by the $6,500 credit, 2010 could in fact be a much healthier housing market.

About the Author:
For more information on your local area and to learn about the benefits of today’s market conditions visit: http://www.tylerfreed.com

Seattle Real Estate Tyler Freed

Home Buyer Tax Credit Official

The home buyer tax credit bill that was recently passed by both the House of Representatives and the Senate has been signed by President Obama and is now official. Given the dissension in the House and Senate over so many other things, the bill slid through relatively easily. The Senate vote was a stunning unanimous vote of 98 in favor to 0 opposed. And the President didn’t delay signing to the bill to make it official.

How will this tax credit bill affect home sales, and what exactly does it do?

The current home buyer tax credit can be as high as $8,000 on the purchase of a home by a first time buyer. The credit allows for 10% of the purchase price, up to $8,000. That credit has been extended and is now good through April 30, 2010. As long as a contract is signed and closed before July 1, 2010, the buyer can claim the credit. For members of the Armed Forces who have been deployed outside the U.S. for at least 90 days at some point between Dec 31, 2008, and the cut-off date for the credit (May 1, 2010), the dates that end the period where they can claim the credit are extended to May 1 and July 1, 2011.

A change to the home buyer tax credit over the current credit is a new bonus for people who have lived in their previous residence for 5 years or more. Anyone who has lived in the same home for 5 consecutive years during the 8 years before the purchase of their next home will be treated as if they’re a first-time home buyer and allowed a credit, though a slightly smaller one than a true first time buyer. These buyers can get up to 10% of the purchase price of their new home, but only up to $6,500.

So now not only will first buyers have added incentive to purchase within the next several months, but people who’ve been in one residence for 5 years or more anytime during the previous 8 years will have a $6,500 incentive to go ahead and make that change.

Another change to the home buyer tax credit is the income cap. Before this bill was signed, a single person could only claim the credit if they made less than $75,000 a year, and a married couple could only claim it if their income was less than $150,000 yearly. Those limits have been raised to extend the credit to more people. Now, single people can make up to $125,000 and married couples can bring in a combined $225,000, and still take the $8,000 first time home buyer tax credit.

This credit still applies only to a primary residence, and can’t be claimed for a second home or investment property. And it also can’t be applied to any residence that sells for over $800,000. The first time home buyer tax credit has also been improved with advanced fraud protection, like clear rules on how to claim the credit with the proper paperwork, and a minimum age of 18 to claim it.

About the Author

For more information on the tax credit and to learn how to benefit in today’s market visit http://www.tylerfreed.com.

Seattle Real Estate Tyler Freed