Louisville Properties Blog
Louisville Properties Blog

Louisville Properties Blog

Few Using Kentucky's Tax Credit for First-Time Homebuyers

As the federal tax credit program for first-time homebuyers is ending, some Louisville homebuyers are taking advantage of Kentucky's lesser-known $5000 tax credit for buying a new house. Kentucky's tax credit went into effect last July 26 and although it cannot be combined with the federal tax credit, Louisville real estate professionals say it is having a positive impact on home sales. The state's tax credit can only be applied to the purchase of a new house not previously occupied. Valeria Cummings, spokesperson for the State Department of Revenue, said that the tax credit program approved 70 Jefferson County homebuyers since the program launched. Across Kentucky at least 414 buyers received approval, which means that more than $2 million in tax rebates have been passed on to homebuyers thus far. The state tax credit program is set to expire on July 26, 2010, once Kentucky has approved $25 million in rebates—whichever comes first. "It was hoped by offering the credit, more people would look at buying homes which could only help improve the economy," Cummings said. One of the first homebuyers to qualify and take advantage of the state program was a couple who bought a $350,000 house off Urton Lane in Middletown. They said they were ready for a bigger home after the birth of twins a few months previously. However, they said that getting the house for $50,000 off the asking price was the most powerful motivator—not necessarily the rebate. "It (the credit) was certainly the icing on the cake," he said. "But more important was the opportunity to buy a brand new home at a tremendous discount." The intention of the state tax credit is to help move a huge inventory of new unsold homes in the Louisville area. If you would like to take advantage of the first-time homebuyers credit,  you must act quickly.  The offer is set to expire in a few days.  Contact Louisville Properties and our professional brokers will help...

Real Estate Industry Looks at New Trend to Sell Vacant Homes in Tough Market Conditions

Real estate professionals have known for years that a furnished home sells much faster than a vacant one. Homeowners and real estate professionals across the country are turning to the process of virtual staging in an effort to sell the many thousands of vacant homes across the country. According to testimonials from real estate agents using this technique with great success, it generates strong buyer traffic at a fraction of the cost of traditional home staging methods that have been used for years as an effective means of marketing a property for sale. A company called Virtually Staging Properties uses a process to transform listing photos of vacant homes into interiors that have been designed professionally via a proprietary image library of artwork, furnishings and accessories. The transformed images lend a realism and authenticity unmatched by other virtual techniques. Starting at as little as $225, the home seller or agent can invest in having their pictures of the vacant house transformed into a "lived-in' home and when prospective buyers arrive for a real tour of the home, they can view the same pictures they saw on their virtual tour for perspective. One REALTOR® who has successfully used this technique said, "With 87 percent of buyers using the Internet to search for their next home, vacant homes are at a distinct disadvantage. Nearly all are uninspiring, with each one looking just like the next one and the next one after that. A vacant property needs to stand out for some reason other than having the lowest price." The virtual staging company does not hide a home's flaws or misrepresent the property, and clients are required to tell potential buyers that the property has been virtually staged. Packages are available in three- to five-photograph packages with prices ranging from $225 to $325. If you are having trouble selling your Louisville Real Estate, contact Louisville properties...

Pending Home Sales See Sixth Straight Increase

A report released recently said that more Americans signed contracts to buy a home in July than in June, marking the longest streak of increases on record. The National Association of REALTORS® pending home sales index rose 3.2% in July after rising by 3.6% in June, which is 12% higher than July 2008, and marks the sixth straight increase since record-keeping began in 2001. The report vastly improved on forecasts by some economists who predicted a much more modest increase of 1.5 percent. Signed real estate contracts are usually considered an indicator of the health of the real estate market because they frequently take weeks, or in some cases months, to complete. NAR chief economist, Lawrence Yun, said that momentum in the housing market has clearly taken a turn for the better. "The recovery is broad-based across many parts of the country," he said. "Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit." People taking advantage of the tax credit for first-time homebuyers are regarded as the biggest part of the rise in home sales, but the tax credit program is scheduled to expire on November 30 and members of the NAR are concerned about what will happen when it does. The NAR said that the affordability of homes also contributed to the rise in home sales. "The average middle-income family can now spend less than 25% of monthly income to buy a median-priced home," Yun said, adding, "Housing payments as a percentage of income in 2009 are at a record low. As long as home buyers stay within their budget, mortgage payments will be very manageable."...

New IRS Rule will Help the Country's Struggling Commercial Real Estate Sector

Commercial real estate owners and developers will get some much-needed flexibility to rework their mortgages or receive loan extensions under a new federal tax rule that could provide some relief to a deeply troubled sector of the real estate market. The new Internal Revenue Service rule will affect loans that are backed by office parks, office buildings, shopping malls and other types of commercial real estate that have been securitized and sold to investors. The owners of commercial real estate that have been battered by tighter lending policies and plummeting property values have had a very difficult time negotiating with lenders on extending and refinancing loans. Many owners are perilously close to defaulting on or already have had to default on loans, particularly loans taken out a few years ago when the commercial real estate market was hot. Typically, commercial mortgages take long periods of time to rework or extend and without this new rule, many more owners would default on their loans, worsening an already reeling commercial real estate market in most areas of the country. Many Real Estate Mortgage Investment Conduits—or Remics—and so-called grantor trusts, popular securitization vehicles for commercial mortgages, have been reluctant to rework or extend loans that aren't in default or at risk of defaulting within 6 or 12 months because they fear losing their tax-exempt status. Due to the uncertainties inherent under the conditions, borrowers are very reluctant to invest in maintaining and renovating properties they may lose when these commercial mortgages come due. According to lender Deutsche Bank, $153 billion of securitized commercial real-estate loans are coming due by the end of 2012, and close to $100 billion of those will face difficulty refinancing. The new rule would grant lenders some room to negotiate with borrowers who are still current on their mortgage payments and the change applies to all loan...

Louisville Reports Fewer Home-Building Permits

The U.S. Commerce Department said recently that home building permits, an indicator of future construction trends, fell last September by the largest amount in five months. The decline came at an unfortunate moment while Congress is considering whether to extend the tax credit for first-time homebuyers. The Commerce Department said that new home construction rose a meager 0.5 percent that month to a seasonally adjusted annual rate of 590,000 units—a weaker than expected showing. Building permits for Louisville homes and other construction were also down for September. So far this year, Louisville and nearby towns issued 592 building permits for new single-family homes. This represents a significant decline from the 789 permits issued for the previous September, according to the City's Codes and Regulations Department website. The home construction industry nationwide has been struggling to recover this year after a steep collapse last year that helped plunge the nation's economy into the worst recession since the Great Depression. The building sector in Louisville and across the country has been plagued by rising unemployment and tighter access to credit for mortgages and other loans. The industry is very concerned that things will get worse if the federal tax credit for first-time homebuyers expires in November as scheduled. The homebuilding industry says that extending and expanding the federal tax credit program for another twelve months would generate almost 350,000 jobs and $11.6 billion in additional tax revenues. Home and apartment construction rose in the southern United States in September by 7.1 percent. However, all other regions showed declines with building activity falling 8.8 in the West, 1.8 percent in the Midwest and 5.5 percent in the Northeast....

Louisville's Economy Still Struggling in 2009 2Q But Housing Prices Up Slightly

During the second quarter of 2009, some parts of the country saw modest gains in economic recovery, but Louisville's economy still appears to be struggling according to a Metro Monitor study released recently by the Brookings Institute. In a ranking of 100 metro areas in the U.S. measured by the unemployment rate, gross metropolitan product, housing prices and percentage of change in employment, Louisville's economy ranked in the lower half. Most of Louisville's economic problems were, in part, the number of automotive and auto-parts manufacturing businesses and financial-services companies, according to the Institute. Of the 100 largest metropolitan areas in the country, only twelve showed greater declines in gross metropolitan product from their peak quarter to the second quarter of 2009. In the second quarter of this year, the Louisville housing market saw a 1.5 percent increase in prices between the second quarter of 2008 and the second quarter of 2009. Louisville real estate agents welcomed the modest gain in prices, however slight, as a sign that the area's real estate market was on the cusp of recovery. Given the diversity in Louisville's housing market, area real estate professionals are confident that Louisville commercial and residential real estate will rebound in the near future after suffering the same problems that metropolitan areas across the country are experiencing. They expect the city's residential real estate market to experience measurable gains before the commercial market as business development in the area is expected to remain flat or only see slight gains for the near future. If you need help the help of a Louisville real estate professional, please contact Louisville Properties at 502-744-9504....

Some Flood-Prone Louisville Homes to be Purchased

Some Louisville residents may be moving soon if the Metro Sewer District's plan, along with the Army Corps of Engineers, provides an option for owners of Louisville homes in flood-prone areas to move elsewhere. The proposal would buy Louisville houses in these areas and homeowners given the option to sell and move. The proposal is still in the development process, but the flooding in the Louisville area in August gave it some momentum. "I've been here 48 years. We've had this problem for 48 years. Every time it rains really hard, we get the problem. Everything floats downhill," said J.D. Marshall who lives on Maple Street. On August 4, many residents like Marshall found their house, car and neighborhood mostly under water from torrential rains. "It took 7 minutes. Before I could even wake them up, the water was in the house," said Marshall. Bud Schardein, Metro Sewer District director, said that thus far, Maple Street is the only part of town that his office and the Army Corps of Engineers have identified as a part of town that could be permanently evacuated and transformed into what he called an "urban green or recreation" space. "It's a complicated process and it has to be approved by the federal government," said Schardein. He says if approved, people in areas prone to flooding would have the option to leave, but would not be forced from their homes. Marshall said he wouldn't have to be forced to move from his Maple Street home. "I'd be the first to go. I'd say back the truck up and let's go. I'm tired. Can't take it no longer," Marshall said....

First-Time Homebuyers Running Out of Time

Folks who want to take advantage of the tax credit for first-time homebuyers are running out of time. Unless Congress votes to extend the program—and some legislators are for it—the tax credit of up to $8000 will expire in December. Given the length of time that it takes to arrange financing, home inspections and all the other requisite tasks to take care of when buying a home, homebuyers are cautioned to get a contract in place before the end of October. In order to qualify for the tax credit, the purchase must be finalized before November 30. Real estate agents and mortgage lenders say they expect to be able to accommodate the extra work as homebuyers scramble to get deals done before the deadline, but are advising against waiting until the last moment. In fact, many are recommending that homebuyers have a home under contract by October 15. "We are doing purchase loans in under 30 days right now," said Sharon Decker, director of mortgage lending for Fifth Third Bank. "But if there is a big surge (in applications), all the lenders will be behind the eight ball." The Louisville real estate market has already experienced a flurry of activity on lower-priced homes in the area, and the looming deadline could bring another round of buyers making offers on houses. Buyers who qualify for the tax credit can receive up to $8000 depending on the purchase price of the home. The program has become very popular and has provided a much-needed boost to real estate professionals and markets across the country. Lobbyists for the real estate industry are lobbying Congress to extend the program and around 15 bills have been proposed thus far....

Alternative Ways to Sell Your Home

When it's time to sell your home, it is easy but a little expensive to go the traditional route and hire a real estate agent to help you sell your home. They have the resources, contacts and infrastructure in place to facilitate the sale of your home and relieve you from having to do the legwork yourself. However, it has never been easier than right now to sell your home yourself using alternative home selling methods such as:
  • For Sale by Owner (FSBO)
Finding FSBO home selling resources and strategies on the Internet is easy. Many communities have their own FSBO websites that make selling your home much easier than it used to be. They provide tools to build a page for your home with a map, pictures, contact information and plenty of showcase space.
  • Flat fee MLS listings
Instead of paying a commission to a real estate professional to sell your home, some brokers offer flat fee listings on the Multiple Listing Service so anyone in the country can browse your MLS listing. However, when the home sells, the seller still must pay a 2.5 to 3 percent Buyer's Agent Commission to the broker who brings a buyer but it is still much less expensive that the typical 4 to 7 percent a traditional broker will charge.
  • Low cost brokers
These brokers market your home for sale at a very competitive price, which can save a home seller a significant amount of money through greatly-reduced sales commissions. They handle all the paperwork, vet the qualifications of potential buyers, help you negotiate the best price and much more. The unequaled marketing power of the Internet allows home sellers to pursue other methods to sell their home that save them money and attract qualified buyers. There's plenty of information...
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