Real Estate Information Archive

Great job keeping our pools, community centers, and parks open in 2010!

 The Mayor and the City Council are announcing the changes for the 2010 Seattle City Budget on June 14th at 10:30am during the Seattle City Council Budget Committee Meeting.

The good news is that all the Seattle swimming pools and community centers will remain open for the balance of 2010!  Great job to all of you who told your personal stories about the Seattle pools, community centers, and park services.  Your voice was heard!  The city council stated that, "Mid-year reductions also recognize the importance of Parks to residents of Seattle" in their agenda.

The most significant reductions to the Seattle parks department budget were closing or reducing open days for some of the city's wading pools.  Also there were significant reductions to park maintenance, management, and personnel.

While this is fabulous news, keep in mind that bigger challenges are ahead in 2011.  There is currently a projected $50 million General Fund shortfall for 2011.  Many of the one-time tools the city used for the 2010 budget update are largely exhausted, and the City is not likely to have the same outcome with regard to direct services for 2011.

Please thank our Mayor and Council Members for their work to save our pools and community centers in 2010, and remind them of the importance of our pools, community centers and park services in 2011.  The City council will receive the results of the 2011 budget work on September 27th, 2010.

The Mayor’s contact information:

Send a letter: The Mayor’s Office, Seattle City Hall 7th floor, 600 Fourth Avenue, P.O. Box 94749, Seattle, WA, 98124
By computer: http://www.seattle.gov/mayor/citizen_response.htm
Phone: (206) 684-4000

Seattle City Council Parks and Seattle Center Committee:
 

Chair Sally Bagshaw 
email: sally.bagshaw@seattle.gov
Phone: (206) 684-8801

Vice Chair Tom Rasmussen
email: tom.rasmussen@seattle.gov
Phone: (206) 684-8808

Member Bruce Harrell
email: bruce.harrell@seattle.gov
Phone: (206) 684-8804

Alternate Member Jean Godden
email: jean.godden@seattle.gov
Phone: (206) 684-8807

For more detail on the Budget Update meeting please see the following link to the City of Seattle Budget Update meeting agenda:

http://clerk.seattle.gov/~public/meetingrecords/2010/budget20100614_3.pdf

Here is a link to the Seattle Mayors Office which has a link to the video of the Seattle Budget Update meeting:

http://www.seattle.gov/mayor/

Keep our pools, community centers, and parks open!

The Mayors Office and Seattle City Council have some tough choices to make this summer in regards to which pools, community centers, and park services will no longer be offered due to a $10,000,000 budget gap for the second half of the 2010 budget.  Let your voice be heard by contacting city leaders.

Your personal story about the pools, community centers, and park services is the most important thing for them to hear to encourage them to keep these services open especially in a down economy when we need parks and recreation services available to us more than ever!

Following are some of the pools and community centers in our neighborhood that may be affected:

•    Helene Madison Pool
•    Bitter Lake Community Center
•    Meadowbrook Pool and Community Center
•    Loyal Heights Community Center
•    Ballard Pool and Community Center
•    Green Lake Community Center
•    Evans Pool

This is the last week before the decisions are announced on June 1st!  Send the  Mayor and City Council your personal story today!

The Mayor’s contact information:

Send a letter: The Mayor’s Office, Seattle City Hall 7th floor, 600 Fourth Avenue, P.O. Box 94749, Seattle, WA, 98124
By computer: http://www.seattle.gov/mayor/citizen_response.htm
Phone: (206) 684-4000

Seattle City Council Parks and Seattle Center Committee:

Chair Sally Bagshaw
email: sally.bagshaw@seattle.gov
Phone: (206) 684-8801

Vice Chair Tom Rasmussen
email: tom.rasmussen@seattle.gov
Phone: (206) 684-8808

Member Bruce Harrell
email: bruce.harrell@seattle.gov
Phone: (206) 684-8804

Alternate Member Jean Godden
email: jean.godden@seattle.gov
Phone: (206) 684-8807

We thought this was interesting.

Share your thoughts below...

NOTE:  If you are having problems viewing the video, click on the link below.

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1386722

Lake Point Luxury Condominium offered at $899,950.

View the full listing by clicking here.

According to the RPX (Residential Property Index) Monthly Housing Market Report released August 1, 2008 for May, Seattle continues to hold the #1 spot for the largest 5-year Annualized % Change and #2 in the 2-year Annualized % change out of the 25 Major Metropolitan Cities (MSA's - Metropolitan Statistical Areas) used by Radar Logic to compile these Real Estate Data reports. 

View the complete report at http://www.radarlogic.com/research/RPXMonthlyHousingMarketReportforMay2008.pdf

It's all over the news and time for 1st Time Home Buyers to jump.

There is tons of inventory out there and now thanks to the recently passed bill HR 3221, there is a 1st time home buyer tax credit incentive!

Following is a list of FAQ's compiled on the http://www.federalhousingtaxcredit.com website, a site dedicated to educating people about the 1st Time Home Buyer Tax Credit.

1. Who is eligible to claim the $7,500 tax credit?
   First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
   
   
2. What is the definition of a first-time home buyer?
   The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
   
   
3. What types of homes will qualify for the tax credit?
   Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
   
   
4. Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
   Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.
   
   In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
   
   
5. What is "modified adjusted gross income"?
   Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
   
   To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
   
   
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
   Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
   
   
7. Can you give me an example of how the partial tax credit is determined?
   Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.
   
   Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.
   
   Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
   
   
8. Does the credit amount differ based on tax filing status?
   No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
   
   
9. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
   In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
   
   
10. I heard that the tax credit is refundable. What does that mean?
    The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
    
    For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
    
    
11. What is the difference between a tax credit and a tax deduction?
    A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.
    
    A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
    
    
12. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    No. The tax credit cannot be combined with the MRB home buyer program.
    
    
13. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
    No. You can claim only one.
    
    
14. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
    
    
15. Does the credit have to be paid back to the government? If so, what are the payback provisions?
    Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
    
    
16. Why must the money be repaid?
    Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
    
    
17. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
    Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
18. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
19. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

One of the many FHA provisions to H.R. 3221, the Housing and Economic Recovery Act of 2008 bill is the prohibition of Seller Funded Down Payment Assistance.  This means that FHA will not recognize and/or accept seller donations for the purpose of down payments. 

SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE.

 Paragraph (9) of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(9)) is amended to read as follows:

 (9) CASH INVESTMENT REQUIREMENT-

 `(A) IN GENERAL- A mortgage insured under this section shall be executed by a mortgagor who shall have paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine.

`(B) FAMILY MEMBERS- For purposes of this paragraph, the Secretary shall consider as cash or its equivalent any amounts borrowed from a family member (as such term is defined in section 201), subject only to the requirements that, in any case in which the repayment of such borrowed amounts is secured by a lien against the property, that--

`(i) such lien shall be subordinate to the mortgage; and

`(ii) the sum of the principal obligation of the mortgage and the obligation secured by such lien may not exceed 100 percent of the appraised value of the property plus any initial service charges, appraisal, inspection, and other fees in connection with the mortgage.

 `(C) PROHIBITED SOURCES- In no case shall the funds required by subparagraph (A) consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale:

 `(i) The seller or any other person or entity that financially benefits from the transaction.

 `(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i).

 This subparagraph shall apply only to mortgages for which the mortgagee has issued credit approval for the borrower on or after October 1, 2008.'

On July 31, a bill (H.R.6694) was introduced that would allow FHA to continue to recognize seller-funded down-payment assistance when borrowers have a FICO score of 680 or greater. Borrowers with FICO scores of between 620 and 680 would also be able to rely on seller-funded gifts of up to 3 percent of their loan principal, but would have to pay increased mortgage insurance premiums.

For further information regarding the bills noted above visit http://thomas.loc.gov/ and enter in the Bill #H.R. 3221, for the Housing and Economic Recovery Act of 2008 or Bill #H.R.6694, the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 .

This information was published by the National Association of Home Builders.  You can view the full articles by visiting their official online weekly newsletter at http://www.nbnnews.com/. 

Well you've probably heard by now that last week legislation approved H.R. 3221, the Housing and Economic Recovery Act of 2008. It contains several provisions that will allow the FHA to deliver a range of mortgage products more effectively. However, the FHA's minimum downpayment has been increased from 3% to 3.5%. The bill:

• Increases the current limit for FHA-insured mortgages to enable deserving potential buyers to purchase homes in more markets across the country. “Permanently raising the FHA loan limit to 115% of an area’s median home price, up to $625,500, will enable more creditworthy borrowers to purchase an FHA-insured home in high-cost markets,” said Dunn.
  
  
• Also increases the floor for area FHA limits from $200,160 to $271,050.
  
  
• Enables the FHA to simplify requirements for condominium loans, which have often been burdensome and have differed significantly from the rules applied to mortgage loans for detached single-family homes. 
  
  
• Expands opportunities for seniors to tap into equity in their home through FHA reverse mortgage loans. The bill creates a higher, nationwide uniform loan limit equal to $625,500, reduces and caps the maximum fee lenders can charge seniors for FHA reverse mortgage loans and establishes protections to prohibit requiring seniors to purchase other financial products in conjunction with these loans. This will help more seniors who are at least 62 years old access the equity in their homes without having to make mortgage payments until they move out.
  
  
• Permits the FHA to extend the maximum loan maturity to 40 years to enable borrowers to reduce their monthly mortgage payments while ensuring that some part of the monthly payment is used to reduce the outstanding loan balance.
  
  
• Allows the FHA to charge higher mortgage insurance premiums, but places a one-year moratorium on implementation of risk-based mortgage insurance premiums.

As reported by NAR (National Association of Realtors) on May, 7th 2008... 

A flat pattern in home sales activity should continue for the next couple months before improving over the summer, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he said. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in March, edged down 1.0 percent to 83.0 from a downwardly revised level of 83.8 in February, and was 20.1 percent lower than the March 2007 index of 103.9.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said additional costs in many markets are hindering a recovery. “Our members are telling us that more buyers are looking at homes but are slow in signing contracts, and that’s contributing to the weakness in pending home sales,” he said. “In many cases buyers are waiting for greater access to affordable credit, especially in higher cost areas, but some are disappointed with what appears to be unnecessarily restrictive lending requirements. The good news this week is there is some discussion toward relaxing some of the burdensome lending practices.”

The PHSI in the Northeast jumped 12.5 percent in March to 80.8 but remains 15.4 percent below a year ago. In the South, the index slipped 0.1 percent to 84.9 and is 26.7 percent lower than March 2007. The index in the West declined 1.4 percent in March to 91.2 and is 9.5 percent below a year ago. In the Midwest, the index fell 10.4 percent in March to 74.1 and is 22.3 percent below March 2007.

Existing-home sales are projected to rise from an annual pace of 4.95 million in the first quarter to 5.82 million in the fourth quarter. For all of 2008, existing-home sales are likely to total 5.39 million, and then rise 6.1 percent to 5.72 million next year. “Although more than half of local markets are expected to see price growth this year, the aggregate existing-home price will decline 2.4 percent in 2008, driven by a relatively few markets that are very oversupplied,” Yun said. The median price is forecast at $213,700 this year before rising 4.1 percent to $222,600 in 2009.

Some areas already are seeing sales increases, underscoring that all real estate is local. In March, unpublished snapshot data shows sales in Bakersfield, Calif., and Jackson, Miss., were higher than a year ago. At the same time, price gains were noted in markets such as Buffalo-Niagara Falls, and Cedar Rapids, Iowa. On May 13, NAR will report first-quarter data on metropolitan area home prices, covering about 150 metro areas, and state home sales.

"Although some market adjustments are necessary, a downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs," Yun said. "It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that."

New-home sales are expected to fall 30.9 percent to 536,000 this year before rising 10.1 percent to 590,000 in 2009. Housing starts, including multifamily units, will probably drop 29.5 percent to 955,000 in 2008, and then rise 1.3 percent to 967,000 next year. The median new-home price is estimated to fall 3.7 percent to $238,000 this year, and then rise 5.4 percent in 2009 to $250,900.

The 30-year fixed-rate mortgage is likely to rise gradually to 6.2 percent by the end of the year, and then average 6.3 percent in 2009. NAR’s housing affordability index is expected to rise 10 percentage points to 127.0 for all of 2008.

Growth in the U.S. gross domestic product (GDP) should be 1.5 percent this year and 2.3 percent in 2009. The unemployment rate is projected to average 5.3 percent in 2008 and 5.5 percent next year.

Inflation, as measured by the Consumer Price Index, is seen at 3.4 percent this year and 2.2 percent in 2009. Inflation-adjusted disposable personal income is forecast to grow 1.2 percent in 2008 and 3.0 percent next year.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for April will be released May 23; the next Forecast / Pending Home Sales Index will be released June 9.