New House Tax Credit Program Should Be Good for Colorado Springs

We've seen some nice activity in the Colorado Springs real estate market from the current First Time Home Buyer Tax Credit program, but the new tax credit program should be even better. Here is a link to the IRS writeup on the new program.

For starters, it isn't JUST for first timers any more. We've needed a little extra incentives for some existing homeowners, to consider a buying move (as if 5% interest rates weren't enough!). While the incentive is a little less ($6500 vs $8000), it is a good start. It also only will apply to primary residence moves, so this won't be an investor or 2nd home purchase program. And it only applies if the prior home was your primary residence for 5 of the last 8 years, thereby excluding anyone who has bought in the last several years and is ready to move on. It will also likely require many to sell before they rebuy, putting some pressure on short term rentals. But all in all, it should help a little at the higher end, because more buyers in the qualifying categories are likely to buy in the higher price ranges than 1st timers.

Some unintended side effects of the program could be:

1. Downsizing sellers could end up putting more pressure on lower priced homes, as well as adding higher priced homes to an already glutted inventory of more expensive homes. The 90th percentile in our market was only $345,000 last month, indicating some of this was probably already happening.

2. The additional buyers this may generate will have houses to sell, adding to the inventory in all price ranges.

3. Builders will see additional activity from this, however more contingent contracts will likely appear, contributing to some increases in 'spec' homes, when move up buyers are unable to sell at terms they can afford.

It is a little cooler today, only 68 (ok, I'm bragging:), but probably the last day of the year that will be that warm. Pretty nice for November, that is for sure! Today's photo is of Mt Sopris, taken from the hills above Basalt last month. Sopris is part of the Elk Mountains, and while not a 14er, presents a nice dramatic backdrop to the Roaring Fork Valley on the way to Aspen.

Got questions about living in Colorado Springs? Call me at 719-590-4768 or 888-568-6784! Visit me on Facebook to see even more photos!

Colorado Springs City Election Presents Hard Choices

The results are in, and Colorado Springs voters have taken a hard line against any kind of increase, or even maintenance of city tax revenue. We are a little famous for being very anti-tax here, so in some ways this should be no surprise. However, it does present some 'interesting' decisions for the city council, seeking to balance a budget that has been hit hard by decreasing sales tax revenue. Of course, all the fun stuff gets paraded out to the chopping block first (parks and bus service for instance). Police and fire salaries, whether by headcount, furlough, or layoff tend to be next. Street maintenance is never far behind, although since they are already doing so little in that area it isn't that productive. Usually not mentioned are mayor and city council salaries (or size), wonder why? My personal hope is that the city will figure out some good creative ways to avoid cutting back things like park maintenance, we have some of THE best parks in the country!
I'm kind of glad Congress is getting serious about extending the 1st Time Homebuyer Tax Credit, both in time and scope. There is still some discussion going on, but I'll cover this when the final version passes, maybe by tomorrow? The extension of the program to some existing homeowners is particularly exciting.
We may set warm weather records 3 days this week, with another day in the 70's for today, pretty great for November! I'll take it, we had snow last week to offset it!
Got questions about living in Colorado Springs? Call me at 719-590-4768 or 888-568-6784! Visit me on Facebook to see even more photos!

Colorado Springs Home Sales Jump in August Over '08

The preliminary sales data from the Pikes Peak Association of Realtors indicates home sales in Colorado Springs for August of '09 to be up a whopping 14.5% over August of '08, while the inventory of unsold homes dropped 20.3% from 1 year ago. Prices are still on the soft side, but down only 5.4% from 1 year for the average, and only 2.5% for the median. The average home sold for 97.5% of the asking price. This is the strongest year to year gain in sales we've seen since I started tracking it several years ago. It is due to several factors, including:
1. Stronger demand from returning GI's to Ft Carson
2. The $8,000 first time Home Buyer Tax credit (which is due to expire in less than 3 months)
3. Low interest rates, still in the low 5's.
A more sobering look indicates prices and sales dropped from July, indicating that we may have seen our best sales month already this year, which follows our normal seasonal pattern.
Got questions about living in Colorado Springs? Call me at 719-590-4768 or 888-568-6784!

First Time Homebuyer Tax Credit Questions Still Coming Up

I've gotten a few questions just in the last week again about the 1st Time Home Buyer Tax Credit, and thought I'd address them here. Note: This post is corrected as of 8-26-09.
This program was put in place to stimulate the housing market by giving qualified 1st time home buyers a financial incentive to buy something now (as if incredible interest rates and low prices weren't already reason enough!). The IRS has a pretty good web site information center on this at http://www.irs.gov/newsroom/article/0,,id=205416,00.html, but let me give you the 'Readers Digest' version.
1. The credit is 10% of the purchase, up to $8,000 ($4,000 for married filing separately). It is a credit, not a deduction, and it is refunded to you even if you did not owe any taxes.
2. It can be taken against your 2008 OR 2009 taxes, so if you already filed 2008, you can file an amended return to get it back.
3. To qualify, you can't have owned a home in the prior 3 years, and it is phased out in the higher income brackets.
4. It is a GREAT deal. Since FHA financing only requires 3.5% down, it effectively means the IRS is making your down payment on an FHA deal all the way to a $228,000 purchase, which is right at the average sale price in Colorado Springs.
5. It only applies to purchases between April 8, 2008 and December 1 2009. This means that even if you bought your house last year, before the economy really tanked, you are still eligible, and if you have not bought yet, you have until 12/1 to close.
6. You have to file a tax return and complete a required tax form in order to get this, it is NOT an automatic. If you've previously filed your 2008 return, you can amend the return to receive this as refund.
Hope this helps! Not a first time home buyer? Not a problem, pass this information along to someone who might be! Questions? Call Rick Van Wieren at 888-568-6784 or 719-590-4768 or email rick@ricksellscolorado.com.
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