What a great time to be a first time homebuyer

I think it would be safe to say that within the 20 years that I've been involved with residential real estate, this is the best period of time I've experienced to be first time home buyer.

• Interest rates are attractive,
• credit is still available to those who have paid their bills on time,
• the FHA loan program offers responsible terms for low down payment loans,
• there is a wide variety of homes to choose from,
• the Greater Lafayette market has not suffered from a "free fall" in property values like we have heard about elsewhere, and most importantly,
• The American Recovery and Reinvestment Act of 2009 authorizes a direct income tax credit to first time home buyers equal to 10% of the purchase price of the home, not to exceeded $8,000.

The tax credit is an amazing opportunity and it is simple. Anybody who has not owned a home as a principal residence in the last three years and closes on the purchase of a new or existing home as their principal residence between 1/1/09 and 12/1/09 is eligible. Once you have closed on your home, you can amend your 2008 income tax return and apply for a refund equal to the tax credit amount or apply the tax credit to your 2009 income tax liability.

There are only two "catches" to the program that I can see. 1) The size of the tax credit is reduced for buyers who have income in excess of $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. 2) Home buyers who use the home as their primary residence for less than three years are subject to a recapture of a portion of the tax credit. For those who live the primary residence for more than three years, there is NO recapture of the tax credit!

For those who are interested in learning more about the program, Coldwell Banker Shook, in conjunction with three local lenders, is conducting several First Time Home Buyers Seminar. They will be offered two more times this spring:

-Tuesday, March 31st, 6:30 at the Tippecanoe County Library -- Klondike Branch (corner of Lindberg and Klondike Roads, or

-Wednesday, April 29th, 6:30 at the Tippecanoe County Library -- Downtown Library.

Each session will last about one hour. They will be very informal. Registration is not necessary.

If you have any questions about the tax credit, shoot me an email and I will do my best to get you an answer (cshook@shook.com).

Charlie

P.S. As I wrote this post, the men's basketball team lost a great game to UConn in AZ. To Matt Painter and the Boiler basketball team, thanks for a great year and helping us remember what student athletics is all about.

Spring is breaking loose!

The trends in residential real estate in Tippecanoe County are encouraging. We see it within our office and I hear if from my colleagues in other local brokerage offices. My "back of the envelope" forecasting tools are primative, but pretty reliable.

1. The number of showings scheduled on listings within our company for three of the last four weeks was above the number of showings scheduled during the same weeks last year (note: the number of properties listed on 3/10/08 and 3/10/09 are within a few properties of each other).
   
2. The cumulative number of earnest money checks received on accepted offers within our office in March is measurably above the cumulative number received at the same point in March last year.
   
3. With the exception of last Sunday, when we experienced stormy weather, Open House traffic has been, by and large, strong.

These may seem like small victories, but they are the types of grass roots activities that are necessary for the market to take off. Let's see if the activities begin to manifest themselves in a strong upsurge of pending sales and, eventually, closings.

I'll keep you posted...

Charlie

Fishermans' Warf

Regretfully, CP Morgan closes

The news we received last week that CP Morgan closed its operations nationwide, is certainly discouraging. They entered our market in 2002 with a blaze and built several neighborhoods on the south side of Lafayette and one north of West Lafayette.

It is never pleasant to learn of any colleague in your profession suffering. The same is true in this instance. We are equally concerned for those who own houses constructed by Morgan. Chuck Morgan indicates that the third party new home warranty companies they contracted with are fully positioned to take on CP Morgan's remaining warranty issues. For those who purchase new construction, this is a good example of the value provided by a third party home warranty. Lafayette is blessed with an abundance of financially solid and very capable home builders, but these situations happen periodically, even to the best managed builders. The third party home warranty company protects the home owner when the builder is no longer in business. For those of you who own CP Morgan constructed homes, it would be a good idea to locate the warranty literature that was provided to you by CP Morgan at your closing.

One of the challenges of marketing a recently constructed home in a subdivision that is not fully built out, is the seller is competing with the same floor plan built new by the same builder (with the benefits of a full warranty). In this instance, CP Morgan will not be competing with their existing cutomers' homes that are listed for sale.

One might ask what happens to the remaining lots. This is not the first time the developer/builder of a subdivision goes out of business before all the lots are sold. It always sorts itself out. I can think of at least three other situations like this where another developer stepped in and responsibly finished the work of the first developer.

Cheers and best wishes for a good week.