First Time Tax Credit Not Just For First Time Buyers

* Extends the $8,000 first time Homebuyers Tax Credit and creates
> a new $6,500 tax credit for qualifying "move-up buyers" purchasing a
> home before April 30, 2010.
> * Qualifying "move-up" buyers include homebuyers who already own a
> home that they have used as a principal residence for 5 years or more.
>
> * Homebuyers with binding contracts as of April 30th will also
> qualify for the credit so long as they complete the transaction within
> 60 days.
> * Available to homebuyers with incomes of up to $125,000 for a
> single return or $225,000 for a joint return.
> * Available for homes which cost less than $800,000.
> * Provides authority to the IRS to do greater oversight while
> processing the return and requires that the taxpayer claiming the
> credit be 18 or older.
> * Members of the military, military intelligence, and foreign
> service who are on qualified extended official duty are not subject to
> the recapture fee and individuals who have been deployed overseas for
> 90 days or more in 2008 or 2009 can claim the credit through April 30,
> 2011

The State of the New Canaan Real Estate Market as of October 31, 2009

As dismal as the year started with very little activity in January and February, the New Canaan market slowly but steadily picked up momentum and has ended its tenth month with marked improvement.

During the last three months of this year, we have actually exceeded last year’s activity during the same three month period by 15% with the number of closings increasing from 46 in 2008 to 53 in 2009.

Year to date, while the average price of sold homes this year is $1,723,241, representing a decline of 20% from last years average price of $2,144,299, the average price of sold homes at the end of September 2009 as compared to the same period in 2008, where the average price was down 21%, it does slow some improvement.*

Regarding the number of closed transactions of residential homes in New Canaan, this year’s numbers are also down 20% as 126 homes sold as compared to the same period in 2008 where 156 homes sold.

There are currently 249 homes on the market now with the average time on the market of 201 days. The average list to sell ratio is 89.25%.

Of the 25homes with pending contracts, 5 are under 1 million, while 10 are pending in the 1 million to 1.5 million category, representing the bulk of the pending transactions.
There are 8 pending contracts in the 2-3million price range and only two pending contracts from 3.5 million to 4.25 million.

Of the contributing factors of sales starting to increase may be that brokers are advising sellers that they have to price their homes more appropriately to attract people who have been waiting in the wings to buy. Even though it is still a buyers market and taking into account an upward trend in sales volume, prices are attractively low and interest rates are also extremely low. Looking at the higher end of the housing market, some owners who had held to their pricing are ready to listen to offers now.

While traditionally the months of November and December in New Canaan are much slower in activity, the spring market is just around the corner. I believe there is much pent up buyer demand for housing as many would be buyers have opted to rent over the last year or two, but they can be expected to purchase in the next year or two. Some of the values of homes being offered in New Canaan are really outstanding, as some sellers are more motivated to sell than others. Buying in November or December may a very smart move as some sellers are really ready to move and don’t want to wait until spring. Understanding the values in the marketplace right now is key to buying intelligently which will pay off as a long term investment.

*Data supplied by Promatch MLS