FAQ about the 2009 Homebuyer Tax Credit Extension

This morning, my inbox has received several notifications about the formal extension of the Homebuyer Tax Credit which will provide financial assistance to many New Home Buyers and Existing Homeowners who are considering the purchase of their next home.  Later in the day, a conversation with a client underscored our need to make sure that as real estate professionals, we provide accurate information from the Federal Government about this tax credit.  Here’s the question:

Question:  If an existing homeowner sells a home and qualifies to utilize the extended Tax Credit, is the date on the contract OR the settlement closing date the one which is used to determine qualifying eligibility?

I spoke with 2 mortgage officers, both of whom were not certain about the answer.  Than I visited the Federal Tax Credit information site (which has not yet been updated to reflect the news of the morning 11/06/09) and also read the FAQ from our State Association & the National Association of Realtors. Why was this necessary?  Well, the answer in part my be the result of changes which are happening very rapidly and the fact that sometimes there is a lack of clarity initially. Here’s the response from the National Association of Realtors (NAR) which was obtained from my local  and state Board.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

This is just on example of the types of questions which consumers will be asking.  Do you know where to send them to get accurate information? The Michigan Association of Realtors has been proactive in getting information out about this program. Other detailed questions about the change in the provisions for the Tax Credit can be found here.

Dramatic Home Sale Increase in 2009 Grand Rapids MI Housing Market Over 2008!!

Good News on the housing front & just in time for the Holidays in Grand Rapids, MI. In a market which has seen the worst of times in recent years, arecent article in the Grand Rapids Press heralding an increase of 35 PERCENT in home sales over 2008 was more than welcome…local professionals are ecstatic!

It’s been great to touch base with so many agents who tell me they are busy again. We sold most of our inventory within the last couple of months and are “re-stocking the shelves.” The ‘HOT PRICE’ range is $100,000 ~ $140,000.

This has helped to increase the average Home Sale Price to $109, 826 which was 3.2 percent higher than the same period in 2008. But…year to date, home prices are still down by 15.1% over 2008, a number which can be attributed to the on-going issues with foreclosures and short sales in the local market.

Other noteworthy improvements in the Grand Rapids, MI market include the decreased number of Short Sales and Foreclosures in September and the possibility of the extension of the Home Buyer tax credit which served to enable over 200,000 new jobs last year according to a quote by Jerry Howard, President of the National Home Builders Association in this article.

Now, all this good news does not necessarily indicate we are totally OK. There are still huge inventory of foreclosed properties which have not yet been placed on the market and joblessness continues to be a scourge on the Michigan economy.  As we near the end of the year, what happens in these two areas as well as the credit markets will send strong signals about the on-going journey of recovery.

If You’re a Homeowner…

These past several months have created some glimmers of hope.  Inventory levels have declined and housing prices have inched up.  More importantly, Sales have increased substantially. One of the critical assessments that homeowners who need to sell a home can make is the OPPORTUNITY COSTS CALCULATION.  It’s a fairly simple calculation which aids in determining how long you should hold on to your home, if this is a time to sell your home and what your carrying costs without a Sale actually are.

An Example...Calculating the OPPORTUNITY COST

For example, let’s say your home is valued at $140,000.  You’ve been in the home for less than a decade and you currently owe approximately $120,000. The OPPORTUNITY COST is determined by taking approximately 10% of your current expected Sales Price and dividing it by 12.  In this case:

140,000 X .10 = 14,000

14,000 / 12 = $1,167 = OPPORTUNITY COST per month

That number $1, 167 is approximately what it will cost you EACH MONTH if home prices DECLINE another 10% over the next 12 months. This year, home prices declined approximately 15% overall from last year, and since 2006, there has been a 30% DECLINE nationwide.  So an improvement to a decline of only 10% is not unreasonable.  You can manipulate the numbers to see a range of options, but most experts seem to think that we can expect declines within the neighborhood of 6% – 10% in home prices over the next year.

An Example…Calculating Your Specific OVER-PRICING PENALTY

OPPORTUNITY COST + CURRENT MORTGAGE PAYMENT = OVER-PRICING PENALTY

For example:  $1,167 + $1,100( est. Mortgage Payment) = $2, 267 (OVER-PRICING PENALTY PER MONTH)

OR…$27,204 PER YEAR

Adding the OPPORTUNITY COST to your current mortgage payment gives you a unique perspective of what it will actually be costing you to OVER-PRICE your house in today’s market.  If you’d like a detailed report about housing & pricing in your specific Grand Rapids, MI neighborhood, please give us a call at 616-791-0511 or e-mail us at info@auduhomes.com.

A Celebration of the Art of Life…ArtPrize 2009

The ‘Nessie’ sculpture remains one of my favorite entries for the ArtPrize contest which took place in Grand Rapids early this fall.  Over 1,000 artistic entries from all over the country and world came to Grand Rapids and were displayed in the streets and buildings of our city.

It’s a wonderful thing to see what the beauty of art can do.  I think it brings out the beauty of people.  As I walked around looking at various entries, I observed people smiling, talking, holding hands and having a great time.  It was a time of wonderful moments!

Expanding the horizon…New role for Lola Audu, Grand Rapids Real Estate

Yesterday, 2 extraordinary events intersected together in 1 day aka 1,440 Minutes. During the Annual Broker Meeting of the Grand Rapids Association of Realtors®, I was nominated by Pat Vredevoodg, 2007 NAR President for the position of President-Elect (2009) & elected by the board of Brokers of the Grand Rapids Association of Realtors®.

It was a moment ripe with symbolism on a variety of levels.  Pat captured a unique essence during her brief nomination speech which she termed as a ‘tweet’ about why the Brokers present should cast their vote in favor of the nomination.

Here’s Pat’s insightful Twitter nomination: Vote for Lola Audu because she is “Smart, Caring, Cutting Edge, Daring, Forward & Clear Thinking, Humble, Funny, RE Pro, Motivator, Responsible, Experienced, Mom, Inspiration“

Later that afternoon, I picked up a direct message on Twitter from Todd Carpenter, NAR’s Social Media Manager who asked me to check my in-box for a message from President-Elect of NAR, Vickie Cox Golder. Here are excerpts from the e-mail which showed up this morning,

Dear Lola,

Congratulations!  You have been identified as an influencer in progressive ideas about real estate and, as a result, we invite you to participate in a new pilot program for the National Association of Realtors ®.  NAR’s leadership would like to include your voice in our governance system in 2010 and have selected a national NAR committee for you to join. …..

By serving on a national NAR committee, you will have the opportunity to bring your ideas about today’s competitive and evolving marketplace to the industry’s leaders and you will be in a position to spark change within the business……

NAR has made a commitment to elevating the voice of young professionals and early adopter of social media in the real estate business, and we want to hear from you…..you were recommended to serve on the Housing Opportunity Committee.

What an opportunity!  I’m so grateful to God that the tapestry which He weaves in our lives through our experiences is never conventional nor is He ever limited by pre-conceived limitations about who we are or can become.

Just about 3 years ago, I decided to write a blog post. Within a month, I stumbled upon Active Rain and signed up.  Looking back, I know realise that I had absolutely NO idea how much that simple decision would change my life and career.

West Michigan ~ Serenity and Classic Elegance ~ Serenity Ridge Development

Serenity Ridge Development, Walker, MI 49544

The Serenity Ridge Development is the location of one of the most picturesque settings on the southwest side of Grand Rapids.  The understated entrance to the development is a marked contrast to the stunning residences which are mounted on gently rolling acreage which winds through wooded terrain.

The homes, which are site condominiums feature the ultimate in luxury.  Most of the residences are custom designed.  There is an association fee of $400 per year.   A leisurely drive through the community is marked by a sense of peace and serenity which in summer is accentuated by the gorgeous landscaping and mature trees.

Serenity Ridge is part of the Grandville school system although the development is located in the city of Walker.   The development is also a mere five minute commute to the Millineum Park and Johnson Park and also within 15 minutes to the downtown area of Grand Rapids. 

For the discrimiating buyer who loves elegance and classic style, this development features the best of all worlds; serenely secluded privacy with the added convenience of accessibility to area attractions.

Average home prices in Serenity Ridge have traditionally retailed in the $350,00 -500,000+ range.  The develpment is also adjacent to another well appointed upper scale community called Canyon Creek Estates. 

Although sales of luxury homes in West Michigan have not been very robust over the past 24 months, I anticipate that this will change as the market picks up and construction on the medical mile transitions to jobs in the medical field.  If you’re interested in pre-viewing the current inventory or considering a relocation to the West Michigan area, contact us at info@auduhomes.com for a complimentary list and neighborhood/community informational packet.

Have we turned the corner yet?

This summer has been busy.  It seems as though cooler than normal temperatures may have spurred a welcome increase in real estate activity. 

 According to data provided by the Grand Rapids Association of Realtors ®, real estate activity has showed signs of stabilizing over the summer months and last month the Multiple Listing Service actually posted the first gain in home prices in 16 months!

A recent Grand Rapids Press article highlights the challenges and the glimmers of hope emerging in the Grand Rapids real estate market.  

At Audu Real Estate, we have witnessed a remarkable increase in purchasing activity.  A recent inquiry by one potential home buyer on a hot property indicated that the home in question had received 11 offers!  This multiple offer scenario is increasingly common as buyers and investors compete for the best deals.

Right now, the $8,000 First Time Homebuyer Tax credit is set to expire on December 1,2009.  This means that homes must be purchased and closed prior to November 30,2009 to qualify for this incentive.  What does this mean to home buyers wanting to use this credit?

Well, for starters…you should definitely be out there looking!  Good inventory is moving quickly.  On the other hand,  lending standards have tightened significantly, thus increasing the average loan process to approximately 45 days to closing.  If you do the ‘math’ backwards, that means that to be safe, it would be wise to purchase your home before October 15th so your closing can occur before the deadline.

If you’d like to see what’s currently on the market, visit our website www.auduhomes.com.  You can also set up a private profile to update you whenever homes that match your criteria are listed or updated.

Rosa Parks Circle…Abstract in Summer

As viewed from the Grand Rapids Arts Museum.  Rosa Parks Circle is a popular place during the summer in Grand Rapids, MI.   A wonderful place to listen to music, dance, have an impromptu picnic, skateboard and just hang out!

6471 Avalon Dr. SE, Caledonia MI…Avalon Pointe Estates ~ Better than New!

This home is no longer listed.  To view more Audu Real Estate Home listings, click here…

Click on the picture to View Virtual Tour of:

 6471 Avalon Dr. SE, Caledonia MI 49316

This two years new 4 bedroom home offers the advantage of good value in newer construction without the hassle of working out the kinks that are normally a part of building. The home is located in Avalon Pointe Estates, a brand new subdivision which offers convenient access to the expressway, schools, hospitals and shopping centers.

Brand new landscaping provides eye catching curb appeal. Spacious with (over 2500 sq ft) and potential for 3500 + additional living area in the basement, the open floor plan opens up to an unusually spacious living and dining room great room style combo. An adjacent office or parlor area offers more flexibility in this well thought out floor plan.  The living room has a gas fireplace and the wall mount for a plasma TV is included.

Enjoy a kitchen with cherry stained cabinets and stainless steel appliances included in the purchase price. Upstairs, the bedrooms are large and the master bedroom has enough room for a lounge space plus it features it’s own walk-in closet with organizer and full bath.

Avalon Pointe homeowners also enjoy the enhancement of access to an association pool and club house amenities. The association fee is $280 per year.

This home is an excellent value!  With approximately 4  more months, astute home buyers can take advantage of the $8,000 New Home Buyer credit.  You can find information on the Tax Credit by searching this blog or contacting us a 616-791-0511.  We’ll be happy to help you understand how you can use this FREE money to buy the home of your dreams.

To arrange a preview for 6471 Avalon Dr. SE, Caledonia MI 49316, please contact Audu Real Estate @ info@auduhomes. or call 616-791-0511.

To view more home listings visit Audu Real Estate

Real Estate Distress Sales ~Are There Signs of Level Off in the Grand Rapids, MI Short Sale Market?

It’s been almost 2 years since the Grand Rapids Association of Realtors began keeping close tabs on the upswing in the sale records for foreclosures and short sales.

Back in  July of 2007, real estate agents were becoming increasingly nervous about short sale and foreclosure sales which were absorbing about 25% of all sales and almost 18% of the dollar volume.  For a market which had NEVER seen those numbers however over 5%, this was a disturbing trend.

Few could have imagined what the numbers would climb to 18 months later when short sales and foreclosures for the month of January 2009 were just below 70% (68.60%) and accounted for 2 out of every 3  sales!

Since that dramatic peak, there seems to have been a levelling off.   From a slight decrease to 67.75 in February, the numbers have continued to drop.  The past several months, the percentage of homes sold in the Grand Rapids, Mi area which have been designated as short sale or foreclosurse has hovered around the 50% mark.

BUT, more importantly, the dollar percentage of these types of sales has dropped dramatically.  Distress sales now account for approximately 40-35% of the total sales volume.  In addition, we are witnessing substantial increases in total homes sold from the same period of time 12 months ago.

For instance, in June of 2009 a total of 624 homes sold versus 452 in June of 2008.  One of the most dramatic rises occurred in March of 2009 when there were 700 homes sold…almost DOUBLE  the number of homes sold in March of 2008 (436 homes sold in 3/2008).

All these signs are welcome in a market which has witnessed a period of time in which 10 homes a day are being foreclosed in Kent County according to a recent report studying these trends.

While we may not be totally out of the woods yet, I am thankful to see this shift continue. I will continue to keep you updated.  Visit my blog for regular updates on the Grand Rapids, MI real estate housing market situation.

Copyright 2009  Audu Real Estate All Rights Reserved

Field of Sunny Dreams…