Founders of Home Buyer Tax Credit Website Launch Campaign to End ‘Marriage Penalty’ in Home Buyer Tax Credit
RISMEDIA, January 28, 2010—The Home Buyer Tax Credit is a great program providing a tremendous stimulus for the real estate industry, but the impact of the tax credit is going to be undermined by the restrictive way that the IRS is interpreting the credit for married couples, according to Joseph Rand, one of the founders of Homebuyertaxcredit.com.
In the guidelines of the Home Buyer Tax Credit, the IRS has inadvertently created a “marriage penalty” by requiring that both spouses must have the same exact ownership history in order to claim the credit, which treats married couples differently from unmarried couples. Joseph Rand and the co-founders of Homebuyertaxcredit.com, Greg Rand and Matt Rand, have launched a campaign urging members of Congress to amend the legislation and eliminate this penalty.
“The Home Buyer Tax Credit is designed to incentivize home purchases this year, and it should have a significant impact,” said Joseph Rand. “But the impact is going to be undermined because thousands of married couples will not be eligible due to a very restrictive reading of the legislation by the IRS. The IRS will only allow married couples to claim the credit if both spouses qualify for the same type of credit in their own right, even if the couple would get a tax credit if they were unmarried. Married couples are tested together, and must both be eligible. This is not the case for unmarried couples, who are tested individually such that if one does not qualify, the other can still get a credit.”
Essentially, the only types of married couples who would be eligible to claim the credit would be married couples in which both spouses are qualifying first-time home buyers, or married couples in which both spouses have owned and lived in the same home for at least five consecutive years out of the last eight.
Greg Rand said that this issue was likely an oversight, and the IRS probably did not intend to exact a marriage penalty that undermines such an important economic recovery program. “Clearly, Congress did not intend to render millions of American married couples ineligible for any type of tax credit, even in cases where both spouses would qualify on their own and in cases where unmarried couples are eligible to claim tax credits,” said Greg Rand. “Marriage is the cornerstone of our society.”
Matt Rand suggested that Congress needs to take immediate action steps to correct this unintentional penalty. “To fix this, either Congress needs to revise the legislation or the IRS has to revise its treatment of married couples to allow for eligibility for a tax credit where both spouses would qualify for a tax credit in their own right if they were single or unmarried partners buying together,” said Matt Rand. “If the IRS is not able to revise its interpretation of the law, Congress should explicitly amend the law to fix the marriage penalty by allowing for equitable treatment of married and unmarried couples.”
The Rands are hoping to draw enough attention to the cause so that Congress will be prompted to act quickly. In addition to the campaign on Homebuyertaxcredit.com, a Facebook cause has also been created to bring awareness to the public and urge them to take action. The Rands encourage any married couples who are being affected by the Home Buyer Tax Credit’s restrictive marriage guidelines to go to www.homebuyertaxcredit.com and submit their story.
For more information, visit www.Homebuyertaxcredit.com.
Home Sizes Fall as Builders, Buyers Embrace Economic Reality
RISMEDIA, January 28, 2010—(MCT)—New-home buyers responded to the tough times in 2009 by opting for smaller houses, driving down the average size of a house built in the United States for the first time in 27 years.
Data recently released by the National Association of Home Builders (NAHB) found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. The last time the average completed-home size fell by a statistically significant amount was 1982.
“You’ve heard the mantra ‘downsize me’ and ’small is the new big?’ Well, last year was definitely a downer,” said Carol Lavender, president of Lavender Design Group, a residential design firm in San Antonio, Texas.
Homeowners surveyed by Better Homes and Gardens magazine said downsizing was becoming a bigger priority: 36% said in November 2009 that they expected their next home to be “somewhat smaller” or “much smaller” than their current home versus 32% who said that in 2008. “Not surprisingly, we see a ‘cents and sensibility’ approach when it comes to buying or improving a home, with practicality and price being the top priorities,” said Eliot Nusbaum, the magazine’s executive editor of home design.
While the small-house movement in the United States has been gaining steam for a number of years, the recession has accelerated it and home builders have responded.
“The era of easy money is over. You really have to think before you go out and decide you need that five-bedroom, five-bath home,” said Rose Quint, the NAHB’s assistant vice president for survey research. “Couple that with the energy cost concerns of consumers today and I think we will continue this trend. Houses will not shrink drastically, but they will shrink.”
Although actual square footage of homes didn’t fall until 2009, the percent of homes with four or more bedrooms in them has been falling since 2007, NAHB data show. And in 2009, the number of homes with three or more bathrooms fell for the first time since 1992.
Two other trends in home construction are contributing to the declining square footages: The prominence of first-time buyers in the housing market and the increasing number of households with members 55 and older who are buying homes.
First-time buyers, driven into the market in good part by the availability of an $8,000 tax credit, are more likely to compromise on home size in exchange for a lower price. And the 55-plus crowd tends to purchase single-story homes, which generally are smaller because of the land costs that favor the more-efficient two-story plans.
“Barely over half of new homes today are built with two stories or more,” Quint said. Two-story homes peaked at about 55% of the market in 2006. For 2010, home builders say they will focus on lower-priced models and smaller homes. More than 95% of builders surveyed by NAHB in January said that was the way they saw their business evolving this year.
The penchant for smaller homes will necessitate some design changes. Builders, attempting to respond to those consumer demands as well as hold the line on prices, told the NAHB surveyors that they were most likely to include these features as standard in their houses this year:
-Walk-in closets in the master bedroom.
-Laundry rooms.
-Insulated front doors.
-Great rooms.
-Energy-efficient windows.
-Linen closets.
-Programmable thermostats.
-Energy-efficient appliances and lighting.
-Separate shower and tub in master bathrooms.
-Nine-foot ceilings on the first floor.
Among the things that builders said they were least likely to add to houses in 2010:
-Outdoor kitchens.
-Outdoor fireplaces.
-Sunrooms.
-Butler’s pantries.
-Media rooms.
-Desks in kitchens.
-Two-story foyers.
-Eight foot ceilings on the first floor.
-Multiple shower heads in the master bath.
-Smaller kitchens.
“You can see that builders are concentrating heavily on energy-saving features,” Quint said. “But a lot of the luxury items are on the chopping block or on hold as builders try to lower costs.”
(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
January 1, 2010
Innovative Home Staging Is Key to Home Sales
RISMEDIA, December 31, 2009—With a $569,000 Tampa home sitting on the market for a year and a half and no signs of a sale, Tracy Truitt was a disheartened Realtor looking for a new approach that would help her sell her listing.
Truitt, a Realtor with Century 21 Elite in Tampa, discovered Showhomes, a home staging company, with what it calls a unique spin on traditional home staging: the nationally franchised company finds people to live in and help stage vacant homes so that they show better and sell faster. Given the declining real estate market, mansions and just about every other type of home are difficult to sell, the company reports.
Showhomes says it staged Truitt’s home and it sold in eight days. “I had an almost full price offer within a week of Showhomes’ staging, and a 25% higher offer than the two offers that had come in previously to the home being staged,” Truitt says.
Showhomes Tampa owner Linda Saavedra says Truitt’s experience isn’t a fluke.
She says the company’s staged homes are selling in a fraction of the time most homes are taking to sell. So are homes all over the country staged with Showhomes’ system, she adds. According to the company, a typical $850,000 home in Florida is taking well over a year to sell in today’s market and the average time it has taken Showhomes to sell these homes is 132 days.
“Recently we’ve had six major success stories with homes that have lingered on the market for over a year,” she says. “Three homes sold within 35 days and two others were contracted within seven days of staging. The home that sold in 8 days has been on the market for over two years and the sale price was 20% more than the offers they received when the home was vacant.”
“Our approach is working,” says Thomas Scott, VP of operations at the Nashville-based corporate headquarters of Showhomes. “We are experiencing similar home sales results in southern California, the Midwest and Northeast. Despite the glut of inventory, there are buyers in the market and they are choosing to purchase homes we have staged.”
U.S. Consumer Confidence Rises Again By Jeffry Bartash
RISMEDIA, December 31, 2009—(MCT)-Consumer confidence rose for the second straight month as more Americans expect the nation’s economy to improve in 2010, the Conference Board reported recently.
The New York-based research organization’s confidence index climbed to 52.9 for December 2009, up from a revised 50.6 in November. Confidence had been expected to rise to 54.0 compared with November’s original reading of 49.5, according to a MarketWatch survey of economists.
The Conference Board’s Expectations Index jumped to 75.6 from 70.3 in November, reflecting more optimism about the future. Yet the Present Situation index, a gauge of how consumers feel now, fell to 18.8 from 21.2—and remained at a 26-year low.
“In general, the survey suggests that individuals are more optimistic about where the economy is headed than where it stands today,” said Jim Baird, chief investment strategist for Plante Moran Financial Advisors. Lynn Franco, director of The Conference Board’s consumer research center, agreed. She said consumers are “rather pessimistic about their short-term prospects.”
Home Sales Surge in Markets across the Country
RISMEDIA, December 28, 2009—(MCT)—November 2009 was a positive month for the real estate industry as home sales surged in a majority of markets across the country. Spurred by low prices and the extended and expanded home buyer tax credit, home sales were up in Las Vegas, Nevada; Ohio, the Midwest; and upstate New York, according to reports late last week. While other reports point to sales being down in California, home prices nationally were up—causing for a wave of optimism to be felt throughout the industry.
Here’s a look at some of the markets across the country that received positive news in the housing sector for the month of November 2009:
Las Vegas, Nevada
By Hubble Smith
Spurred by low prices and the extension of the federal tax credit, existing home sales in Las Vegas increased 50.8% to 3,952 in November 2009, Las Vegas-based SalesTraq recently reported. The surge ended a seven-month streak of sales topping 4,000, but still shows strong demand for home purchases heading into the traditionally slow holiday period.
Ohio
By Jim Weiker
During November 2009, 1,839 homes were sold in the Columbus, Ohio area, nearly 60% more than in the same month last year and the highest November sales in four years, the Columbus Board of Realtors reported.
Midwest
By Courtney Hudson
Home sales in the Midwest jumped 58% in November 2009, the strongest showing of any region, as first-time buyers rushed to claim a temporary federal tax credit.
California
By Kevin Smith
Home prices rose in Los Angeles County and California last month but sales were off from October 2009, the California Association of Realtors (CAR) recently reported.
Albany, New York
By Chris Churchill
The federal tax credit for first-time buyers sparked a rush to buy homes in November 2009, boosting property sales across the Capital Region. The numbers led some observers to proclaim that the region’s housing market is now headed for full recovery.