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Tax Credit for First Time Home Buyers
Tax credit for first time home buyers is a great incentive to purchase a home in SW Florida. Last year, Congress passed a tax incentive for first time home buyers with the notion it would encourage and motivate potential buyers and stimulate the housing market. That tax credit however was a repayable interest-free loan that many first time home buyers had trouble with. This year, with the new president and a new economic outlook, the first time home buyer has much more to look forward to in the home buying avenue. The American Recovery and Reinvestment Act of 2009 is well underway and gives home buyers another opportunity to own a home. What is it?
The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. This tax incentive does not have to be repaid which makes it a true tax credit. This is great news if you have been thinking about purchasing a home in SW Florida! There a few eligibility requirements for the first time home buyer that have to be met in order to receive the credit.
For instance, the home you purchase must be used as your primary residence for a minimum of three years. Otherwise, you will have to repay the tax credit amount unless you meet certain criteria for exception. It is best to check with an accountant to get more detailed information on the allowable exceptions. Also, in order to receive the tax credit, a first time home buyer should not have owned a principal residence during the three-year period prior to the purchase. There are also income limits to receiving the tax credit. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. Again, this is an area of expertise for an accountant or tax professional.
The economic stimulus plan has made participating in the tax credit for first time home buyers fairly easy. You claim the tax credit on your income tax return. The IRS has Form 5405 which helps determine the home buyer’s tax credit amount. That's it! No other forms are required. So now potential first time home buyers have more advantages in the real estate market. According to the Florida Housing Finance Corporation's research, the tax credit will help more than 3,000 people into new homes.
Keep in mind that in SW Florida there are many homes with low asking prices, as well as short sales and foreclosures on the market ready and available for purchase. Also keep in mind that in order to qualify for the 2009 tax credit, a signed contract on a home must be completed by November 30, 2009. There is still time to take advantage of the first time home buyer tax credit as well as the low interest rates- this is the perfect combination to make your dream of owning a home possible.
Contact one of our Real Estate professionals for more information on first time home buying incentives.
Cape Coral Housing Market is on a Positive Trend
The Cape Coral housing market is on a positive trend. Whether you are a first time home buyer or you are looking to purchase a second home, the largest increase in sales is mainly from buyers taking advantage of the lower pricing and abundance of homes in Cape Coral to choose from.
With the average Lee County home sitting on the market for upwards of 120 days, buyers have the upper hand in negotiating final pricing that is around 90% of the already low asking price. Lee County, with its world-class beaches, including Sanibel and Captiva Island, Bonita and Ft. Myers Beach, its international airport with direct flights to and from Europe, as well as its exceptional university located just south of Ft. Myers makes purchasing a home even more enticing.
We are getting a lot of potential home owners inquiring about the bank owned properties in our area. Accordingly, the bank-owned properties continue to impact our sales and closings. Since June of last year, 66% of all single family homes sold listed in the MLS were bank-owned; of these 64% were cash deals, according to the REALTOR® Association of Greater Fort Myers and the Beach, Inc.
Home sales continue to rise in our area and in June there were 1,586 homes sold, which is a 121% increase from June 2008. Again, this is an indication that the Cape Coral housing market is on a positive trend and possibly on a more upward spiral. In addition to the always warm climate and pristine beaches, Lee County offers a relaxing lifestyle which has consistently attracted second homeowners and vacationers, a government which is business friendly, accessible beachfront or canal front properties and median home prices 50% below the national average. For example, the REALTOR® Association of Greater Fort Myers and the Beach, Inc. states that in June the median price for all homes was around $83,000. To date, the median price for “traditional” sales is $175,000. For the available bank-owned homes the median price is $69,000 and $105,000 for short sales.
According to the Lee County Economic Development, Ft. Myers, Cape Coral and surrounding areas have acquired the reputation as being some of the best places to live, vacation or own a second home. With that in mind, the potential buyers we are seeing are “market watching” which means they are seeing the growth in our area and are getting more excited about purchasing a home at an affordable price in an area that is economically stabilizing at a steady pace. Additionally, our office is seeing more and more banks working closely with us to process short sales which coincide with the stabilizing market.
With the steady and consistent economic growth, the affordable and abundant homes available to buyers, the consideration of the banks and lenders; it is only likely that Cape Coral will stay on the positive trend, steady pace and rising swing we are experiencing now. For more information on bank owned properties, short-sales, foreclosures and traditional home buying please contact one of our team members at 239-542-8521 or visit us on the web at www.capecoralrealestateandproperty.com
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