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Real Estate Market Review |
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| Market Update > As of January 1 |
Another year has come and gone, and what a year it was in real estate. According to the Minneapolis Area Association of REALTORS® (MAAR), pending sales activity through Nov. 2009 was up 19.6 percent over 2008 with 49,474 sales on the books by the end of November; that’s compared to 41,353 at the same time in 2008.
By December, the months’ supply of inventory, which measures how long it will take to sell all of the homes on the market at the current rate of sales, was down to 5.7 months from 8.5 in 2008 – a marked improvement and the lowest since April 2006.
Sellers enjoyed a reduction in the number of days their home was on the market before sale in Nov. 2009 versus Nov. 2008: 127 days vs. 149, respectively.
Perhaps the most significant story in 2009 was the leveling off of sales price declines. Through Oct. 2009, Standard and Poor’s Case-Schiller Home Price Indices, the leading measure of U.S. home prices, measured approximately nine months of improved readings, beginning in early 2009. Locally, the Nov. 2009 median sales price of $170,000 in the Twin Cities area was even slightly above Oct. 2009 – and the lowest year-over-year price decline in more than two years, according to MAAR. This continues to be the best indication of market recovery.
This spring will undoubtedly see a lot of sales activity, thanks to great prices, low interest rates and the tax credits available to first-time and repeat homebuyers. Qualified, prospective homebuyers looking to capitalize on either tax incentive ($8,000 first-time homebuyer or $6,500 repeat homebuyer) will need to have a signed purchase agreement by April 30, 2010, and will need to close on their home by June 30, 2010.
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Tax credits are now available for first-time homebuyers and current homeowners!
The $8,000 first-time homebuyer tax credit is extended
- Now, qualified first-time homebuyers would receive a tax credit of up to $8,000 if they sign a purchase contract by April 30, 2010, and close by June 30, 2010
- The home purchased must be their primary residence
- Buyer cannot have owned a home during the past three years
- Tax credit is up to 10 percent of the home’s value (not to exceed $8,000)
- Annual income caps to qualify for the tax credit will increase ($125,000 for single filers / $225,000 for joint filers)
- Buyers don’t need to repay the tax credit if they occupy the home for three years or more
- Members of the military who are serving overseas on “official extended duty” for a least 90 days during 2009 and the first four months of 2010 have an extra year to take advantage of the credit
New $6,500 tax credit for current or previous homeowners purchasing a primary residence
- Now, qualified repeat homebuyers would receive a tax credit of up to $6,500 if they sign a purchase contract by April 30, 2010, and close between November 7, 2009, and June 30, 2010
- Eligible homebuyers must have lived in their current home for five consecutive years of the past eight years
- The new home’s cost can be less than that of the current home
- Tax credit is up to 10 percent of the home’s value (not to exceed $6,500). Purchase of homes priced above $800,000 are not eligible for the tax credit
- Annual income caps to qualify for the tax credit will increase ($125,000 for single filers / $225,000 for joint filers)
- Buyers don’t need to repay the tax credit if they occupy the home for three years or more
- Members of the military who are serving overseas on “official extended duty” for a least 90 days during 2009 and the first four months of 2010 have an extra year to take advantage of the credit
Consult a tax advisor for details about your specific situation.
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