House votes to extend homebuyer credit 3 months

House votes to extend homebuyer credit 3 months

WASHINGTON – June 30, 2010 – Homebuyers would get an extra three months to complete their purchases and qualify for a generous tax credit under a bill overwhelmingly passed by the House on Tuesday.

Under current law, homebuyers who signed purchase agreements by April 30 have until today, June 30, to close on the sale to qualify for tax credits of up to $8,000. The bill would give buyers until Sept. 30 to complete their purchases.

The extended deadline only applies to people who signed purchase agreements by April 30. The National Association of Realtors estimates that about 180,000 homebuyers who already signed purchase agreements are likely to miss the deadline.

“We owe this to the people who have essentially followed the rules who are caught by a closing date,” said Rep. Sander Levin, D-Mich., chairman of the House Ways and Means Committee.

The bill passed 409-5. It now goes to the Senate, where senators were working Tuesday evening on a bill that would extend the tax credit and extend unemployment benefits for workers who have been laid off for long stretches.

The Senate could vote on its bill as early as this week – if senators can round up 60 votes to overcome a filibuster.

The popular tax credit has helped to stabilize the nation’s slumping housing market. Nearly 3 million taxpayers claimed the tax credit through May 22 – claiming more than $21 billion – according to the Treasury Department.

The Realtors group says the tax credit has generated 1 million new home sales that wouldn’t have happened otherwise.

The bill would also make it easier for the Internal Revenue Service and state prison officials to share information about inmates in an effort to fight fraud. The Treasury Department’s inspector general for tax administration reported last week that nearly 1,300 prison inmates had improperly received more than $9 million in homebuyer tax credits while they were locked up.

The report said the IRS did not have up-to-date information on inmates.

The tax credit for first-time homebuyers was part of President Barack Obama’s economic recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month.

Delays with mortgage lending and appraisal companies have meant that home sales are taking far longer to complete this year.

“A lot of lenders weren’t able to handle the influx of loans that came with the tax credit,” said Lucien Salvant, a spokesman for the National Association of Realtors.

There have been particularly long delays for buyers of so-called short sales – ones in which banks agree to accept less than the total mortgage amount. In Las Vegas, for example, short sales made up nearly a third of all sales last month.

Many banks “just don’t have the process to the point where they can do it in a reasonable amount of time,” said Jack Woodcock, a real estate agent in Las Vegas. Extending the tax credit deadline, he said, would be a welcome relief to those borrowers, many of whom “made their decision based upon that tax credit.”

Copyright © 2010 The Associated Press

Buyers drive hard bargains in a tough market

NEW YORK – June 29, 2010 – Unrealistic buyers are ruining the deal for sellers who are unwilling to make extreme concessions, some real estate practitioners complain.

“We see buyers who must have learned their moves from the World Wrestling Federation,” says Glenn Kelman, CEO of the online brokerage Redfin. “They think the final smack-down occurs at the inspection, where the seller will be reluctant to refuse any demand because the alternative is putting the house back on the market as damaged goods.”

But buyers say they’re simply being smart.

“We had the position, ‘If the seller is willing to come down enough, we will buy this home,” says Chris Dunn, a consultant in Chicago, who sought a 10 percent reduction on a property priced at more than $500,000. “If they weren’t willing, we would have just moved on. In this market, you have a lot of options.”

Source: The New York Times, David Streitfeld (06/17/2010)

Top 10 fastest growing U.S. counties

Top 10 fastest growing U.S. counties

WASHINGTON – June 28, 2010 – The fastest-growing counties in the country, according to the U.S. Census Bureau, are mostly in suburban areas outside of urban centers. The report calculates changes as of July 1, 2009, the most recent data available.

The census numbers govern the distribution of more than $400 billion in federal money each year.

10 fastest-growing counties

1. Kendall County, Ill. (Chicago), 92.1 percent
2. Pinal County, Ariz. (Phoenix), 89.7 percent
3. Rockwall County, Texas (Dallas), 88.9 percent
4. Flagler County, Fla. (Jacksonville), 83.9 percent
5. Loudon County, Va. (Washington, D.C.), 77.6 percent
6. Forsyth County, Ga. (Atlanta), 77.4 percent
7. Lincoln County, S.D. (Sioux Falls), 70.7 percent
8. Paulding County, Ga. (Atlanta), 67.4 percent
9. Williamson County, Texas (Austin), 64.3 percent
10. Douglas County, Colo. (Denver), 64 percent

Source: CNNMoney.com

Gulf residents awash with ingenuity

Gulf residents awash with ingenuity

ORANGE BEACH, Ala. – June 25, 2010 – A massive island-building project off the coast of Louisiana. Metal pipes and pilings strung across the Gulf entrance of Perdido Bay in Alabama. Thousands of volunteers lined up in Florida to go into action before the looming oil threat washes ashore.

Increasingly, communities are taking oil spill matters into their own hands. Rather than wait for solutions from the federal government or oil giant BP, they are launching their own countermeasures.

"People here are realizing that we're not getting the kind of response we need," says Nancy Johnson, a Mobile County spokeswoman. "They're no longer going to sit and wait and hope that their environment is protected by someone else."

Local engineers here are overseeing the installation of a 1,100-foot-long floating boom across the waterway, known as Perdido Pass. It is a local idea implemented with state dollars to keep the oil out of the bay, Orange Beach Mayor Tony Kennon says.

An earlier boom placed across the pass was stripped away by tidal currents. Instead of waiting for the Coast Guard and BP to improve their strategy, the city hired local engineers who came up with the new fix and tapped into $4 million of a state fund created by BP, the energy giant responsible for the oil spill.

It could have taken more than a month to get Coast Guard-BP approval, Kennon says. Acting on their own initiative, workers began the project within a day of getting environmental approval.

"No one's going to protect your backyard like you're going to protect your backyard," Kennon says.

Similar innovation is springing up elsewhere. At the mouth of the Fowl River in Mobile Bay, local officials asked the Coast Guard for more boom and a skimmer for more than a month, says Mobile County Commissioner Mike Dean, whose district includes the threatened communities. When those requests were ignored, county leaders drew up a plan to create a 600-foot-long berm made of empty oyster shells that would block the oil from spreading inland and filter the water passing through to one of the area's most sensitive estuaries.

The county is seeking $1 million from a $25 million block grant fund given to Alabama by BP for such projects, Dean says.

"We want to be proactive on this," Dean says, "not sit and wait until it gets here and the damage is done."

More than 90 million gallons of crude has gushed into the Gulf since the Deepwater Horizon rig exploded and sank in April, killing 11 crewmembers and sparking the largest oil disaster in U.S. history.

Filtering through ideas

Many of the plans to protect the Mississippi-Alabama-Florida Panhandle coastline were drafted years ago with input of local leaders, says Lt. Cmdr. Natalie Murphy, a Coast Guard spokeswoman in Mobile.

Increasingly, local ideas are being written into the strategy, she says. Earlier this month, one of the fishers attached an aluminum frame to his shrimping boat that scooped up more than 1 ton of tar balls, Murphy says. The Coast Guard is replicating the frame to attach to other boats. A Coast Guard official is now assigned to each county emergency operations center, listening for ideas, she says.

Another approved project: a dredging initiative to fill in a missing section of Dauphin Island off Alabama's coast.

"There's been a lot of ingenuity at the local level," Murphy says. "They know these waters best."

The most publicized local initiative has been an ambitious project to rebuild 128 miles of barrier islands off the coast of Louisiana, an idea hatched by Plaquemines Parish officials.

After weeks of pressure from Louisiana Gov. Bobby Jindal, the federal government approved and BP agreed to finance a 45-mile portion of the state's plan. Local officials hope the berms will block the oil at sea, before it reaches sensitive marshes where it would be harder to remove.

The project takes advantage of local expertise, Jindal has said, because of ongoing coastal restoration work in the state.

BP agreed to pay $360 million for six sections of berm, says John Curry, a spokesman for BP.

"We're going to make things right," Curry says.

More than 150 dredging boats and barges will work simultaneously on the project, making this the largest dredging operation in U.S. history, says Garrett Graves, director of the Coastal Protection and Restoration Authority of Louisiana, which is overseeing the work.

The work was needed because BP and the federal government could not produce the 11 million feet of boom the state requested to protect its 40 million feet of shoreline, Graves said.

The plan is to dredge sand from areas adjacent to some of the islands, and to take sand from "borrow sites" miles away and ship it to where other islands will be built, Graves says.

The borrow sites were identified to feed future coastal restoration projects to replace wetland that eroded because of oil and gas activities and to buffer against hurricanes. Louisiana already has restored 16,400 acres of eroded land and was in the process of restoring an additional 12,300 acres when the Deepwater Horizon oil spill occurred.

"We're using sand resources that we were going to use to restore the coast, but now we're rebuilding this berm with it," Graves said.

Volunteers in standby mode

In Florida, where tar balls and light oiling have hit Panhandle beaches but the rest of the coast is still clear, according to NOAA, an army of volunteers has signed up to clean beaches before oil arrives or to stand by if it does.

Unlike hurricanes, when hundreds of thousands of volunteers can go into action removing debris and helping people, waiting for an oil spill to arrive has been hard for those who want to help, says Wendy Spencer of Volunteer Florida, the governor's commission on volunteerism.

"We have 14,000 volunteers registered throughout Florida," Spencer says. "Of those, about 3,000 have actually been mobilized in an activity."

Most have cleaned beaches of debris before the oil arrives, which prevents oil being carried back to sea with the tide, she says. Only trained workers paid by BP are allowed to handle the oil and fouled wildlife.

Others have helped with the influx of frustrated volunteers who can't find enough to do because the oil has not yet arrived, says Michelle Simoneau, national spokeswoman for the Suncoast Seabird Sanctuary near St. Petersburg, a wild bird hospital.

"Our rescue hotline has been inundated," Simoneau says.

Many drive several hours to the sanctuary, armed with toothbrushes to help clean oiled birds. Upon arrival, "they're upset," she says. "They want to help and there's not much they can do."

Some volunteers are accepting donations of towels, toothbrushes and cash, and lending an ear to angry visitors worried about the threat to the state's seabirds during hatching season.

The sanctuary can handle about 8,000 additional patients.

"We're being told that we'll be utilized more," Simoneau says. "We're gearing up for that. Right now, we're collecting and doing what we can."

Copyright © 2010 USA TODAY

Fed holds interest rates steady

Fed holds interest rates steady

WASHINGTON – June 24, 2010 – Americans showed far less appetite to buy new homes last month after the government stopped offering a homebuyer tax credit. The news signaled a renewed housing slump that threatens the broader U.S. economy.

Sales of new homes fell in May to their lowest level on record, plunging 33 percent from the month before. The bleak data followed a report earlier this week that sales of existing homes dipped, too.

The Federal Reserve, mindful of the fragility of the housing market, struck a more cautious tone Wednesday in its read on the economy. It said only that the recovery is “proceeding.” It had previously said the rebound was strengthening.

The Fed repeated its pledge to hold interest rates at record lows to fuel economic growth. That has helped keep mortgage rates down, but even ultra-low rates couldn’t overcome the chilling effect on new-home sales caused by the end of the tax credits.

The government offered up to $8,000. To qualify, buyers had to sign a contract by April 30.

“We all knew there would be a housing hangover from the expiration of the tax credit,” wrote Mike Larson, real estate and interest rate analyst at Weiss Research. “But this decline takes your breath away.”

High unemployment and slow job growth are weighing on the housing market as well. Fed Chairman Ben Bernanke has expressed confidence that the nation won’t fall back into a “double dip” recession. At the same time, the recovery remains vulnerable, and one of the chief threats is the real estate market.

New-home sales for May came in at a seasonally adjusted annual sales pace of 300,000, the Commerce Department said Wednesday. That was the slowest in the 47 years records have been kept. And it was the largest monthly drop on record. Sales have now sunk 78 percent from their peak five years ago.

The broader economy is feeling the impact. The drop in new-home sales means fewer jobs in the construction industry, which normally powers economic recoveries. This time, construction has remained lackluster.

Each new home built creates roughly three jobs for a year and generates an average of $90,000 in taxes, homebuilders say. The effect extends to other industries, from lumber yards to makers of kitchen faucets.

The discouraging report on housing “really speaks to the sustainability of the economy without stimulus” from the government, said Wells Fargo Securities economist Anika Khan. “We are still very much in the nascent stages of the recovery.”

Buyers who signed sales contracts by the April 30 deadline have until June 30 to close on their purchases and qualify for the tax credit. Because the new-home sales report measures contracts to buy homes, it offers a glimpse of what the housing industry will endure throughout the summer.

Michael Sivage, CEO of Sivage Homes, which builds homes in Albuquerque, New Mexico, and San Antonio, Texas, said, “We had a really strong start for the year, but then when April 30th hit, it was almost like turning off the spigot.”

Homebuyers’ sentiment has shifted over the past year as prices have stabilized, said Rick Porter, president of Atlanta builder Richport Properties.

“They have determined that there’s good value in housing right now,” he said. But he added that potential buyers are still concerned about their finances and are being cautious about making a major decision.

“We don’t have them on the sidelines waiting for prices to fall,” Porter said. “They’re on the sidelines waiting for the economy to stabilize.”

Unlike new homes, sales of previously occupied homes are recorded not when a contract is signed but when a sale closes. That can sometimes take two months.

That’s why there were expectations this week for strong sales of previously occupied homes through June. But the 2.2 percent drop in May from the previous month showed the entire industry is weakening.

New-home sales fell nationwide from April’s levels. They dropped 53 percent from a month earlier in the West and 33 percent in the Northeast. Sales dropped 25 percent in the South, 24 percent in the Midwest.

Builders sharply scaled back construction after the housing market bust. The number of new homes up for sale in March fell to the lowest level in nearly 40 years. But the sluggish sales pace in May means it would still take eight and a half months to exhaust that supply. A healthy level is about six months.

The median sales price in May was $200,900. That was down 9.6 percent from a year earlier and down 1 percent from April.

New-home sales made up about 7 percent of the housing market last year. That’s down from about 15 percent before the bust. Demand for new homes has slumped, partly because builders have been forced to compete with foreclosed properties that sell at steep discounts.

One bright spot emerged Wednesday from a survey of corporate executives. It found the number of CEOs planning to ramp up hiring has reached its highest point since mid-2007.

The Business Roundtable, an association of CEOs of big U.S. companies, said its survey shows 39 percent of chief executives expect to boost their payrolls in the second half of 2010. Only 17 percent say jobs will drop. About 43 percent expect no change in the size of their work force.

Copyright © 2010 The Associated Press

Calif., Fla., other states to get more housing aid

Calif., Fla., other states to get more housing aid

WASHINGTON – June 23, 2010 – The Obama administration has approved five state-designed plans to help homeowners as part of a $1.5 billion effort to assist areas slammed by the housing bust.

Treasury Department officials, who spoke on condition of anonymity because the decisions had not yet been made public, said plans for Arizona, California, Florida, Michigan and Nevada had received approval.

The states estimate that the plans are projected to help up to 93,000 homeowners. That’s a small part of the administration’s main existing $75 billion mortgage assistance program, which is widely viewed as a disappointment.

President Barack Obama unveiled the state assistance effort in February. Since then, state agencies have designed their own approaches, largely focused on borrowers who owe more on their properties than their homes are worth or those who have lost their jobs.

Officials say the state efforts could be used to make changes to the administration’s broader mortgage assistance plan. The state agencies are planning to work with local housing groups to put the plans in place.

According to the proposals from the states, the largest recipient of the funding is California, which will get nearly $700 million to assist about 46,000 borrowers. Florida is getting the second-largest pot of money, $418 million. That will help about 12,500 borrowers.

Michigan will receive about $155 million to assist 17,000 borrowers, while Arizona will receive $125 million for 12,000 borrowers. Nevada will receive $103 million for about 5,000 homeowners.

Besides these states, the Obama administration is providing an additional $600 million in financial support to help homeowners in states with high rates of unemployment.

Those states – Ohio, North Carolina, South Carolina, Oregon and Rhode Island – have submitted plans to the Treasury Department. They are being reviewed now, with approvals expected in August.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis, which have met with limited success.

More than a third of the 1.2 million borrowers who have enrolled in the Obama administration’s main mortgage modification program have dropped out, officials said this week. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.

Copyright © 2010 The Associated Press