Robert Hahn wrote an article that appeared on Inman News recently that was ripe with 2010 predictions regarding the state of Real Estate in the country. It is a good read and I liked his take on many of the subjects.  Aside from mentioning the Jets not going to the Super Bowl, Hahn predicted that 2010 will actually see a worse housing market than 2009.

I get tired of reading rosey, pollyanna housing news from NAR and other sources and found Hahn’s prediction to be smart and potentially right on.  Of course all real estate is local and just the other day I posted a 2010 Columbus area market prediction of around a 12-15% increase over this year through April, but this is what Hahn had to say…

“A number of experts believe that the housing market will recover in 2010. Lawrence Yun, chief economist of NAR, recently said that the real estate market will rebound in the spring and summer of 2010. Strong sales numbers in the third and fourth quarters of 2009 have a lot of real estate people thinking that we have hit bottom, and that the market will rebound in 2010.

I don’t believe it. Jonathan Miller of Miller Samuel recently presented at a meeting of Lucky Strikes Social Media Club, and suggested that the strong third-quarter numbers were the result of time-shifting of second-quarter demand, spurred on mostly by the first-time homebuyer tax credit program.

Add to that notion the fact that unemployment still remains high, with no sign of recovery on that front, at least from a private sector that is bracing for higher taxes, more regulation, a national health care plan, and the possibility of carbon tax. The extension of the homebuyer tax credit is surely a positive for the housing market, but unless the employment picture improves I can’t see the market rebounding in a real way.

And some knowledgeable folks (including the aforementioned Miller) believe that there are some 2 million-plus housing units in foreclosure that have simply not been released to the market yet for a variety of reasons such as moratoriums, overwhelmed staff at banks, and reluctance to write down the asset value. Maybe not all of that inventory will hit in 2010, but banks can’t keep deluding themselves and us.

So I’m predicting that 2010 will be actually worse than 2009 was. Call me a pessimist, and hope that I’m wrong.”

First time buyers could buy this 4 bedroom, 2.5 bath home in Old Towne East for around $250K

This afternoon President Obama signed the bill into law that will extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30.

I’m surprised that they left the two month window but I think it’s very smart. Still, even if it were this week, I would not try to buy a short sale property or a foreclosure that doesn’t have the deed in the bank’s name even with the 7.5 month leeway.

Here’s the best part–a tax credit for SELLERS. The bill creates a $6,500 credit for those who buy a home after living in their current house at least five years. That will apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years.

The credit will be available only for the purchase of principal residences priced at $800,000 or less.

This is huge. If you have owned your Columbus area home for at least five years–and I believe you must have lived in the home for at least five of the last eight years–you too can receive a credit. I can’t envision a scenario where you could claim both sides of the tax credits unless it was something along the lines of you selling your home and then turning around and buying the next home in your new spouse or girl/boyfriend’s name who has not owned a home.

The bill will raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

This is important. It opens the tax credit up to a whole new set of first time buyers who were not previously eligible and who could, conceivably, purchase a home with a little higher price tag that this year’s crop of first time home buyers weren’t even looking at.

Clintonville

Greater Short North including Harrison West, Italian Village and Victorian Village

German Village and Brewery District

Schumacher Place and Merion Village

Greater Olde Towne East

Grandview Hieghts and Marblecliff

I've always loved the stone pillars flanking this Bexley Home

Instant Equity. Two words anyone buying real estate in Clintonville, Bexley, Grandview, Downtown, Short North, Berwick, Westgate or anywhere else in Central Ohio love to hear.

The problem is, I’ve heard those two words too often lately. The problem is the context and the definition of instant equity.  In my opinion, anyone buying a home that has instant equity is anyone buying a home at a substantial discount to the Market Value of the  home. That range from selling price to market value equals instant equity (though the bank might not think so).

What I’ve heard a lot lately is something along these lines, “…and this Seller paid $338,500 for it just a few years ago and is selling it for only $299,900. That’s a lot of instant equity for your buyer!”

Hold on a minute Buster, who cares what the Seller paid for it! In today’s market, if the home the Seller paid $338,500 for in 2006 is only worth $290,000 then there is NO instant equity. It’s simply priced at or around market value. Market value simply means whatever the market (all you buyers out there in Columbus thinking of buying a home) is willing to pay for it.

Hold on though, because it works both ways…..I always tell Buyers that what the  Seller paid for the home has no bearing on what the home is worth.  That means if the Seller bought the Columbus home via foreclosure, at auction or even on the market with Instant Equity….ie-if the Seller got a deal…you can’t punish them when buying the house. They are the one who got the deal, they deserve to make a profit and the Buyer should anticipate paying market value for the home. Just because the Seller got a deal on the home doesn’t mean she has any obligation to pass that deal on to the Buyer.

I really do feel bad for 2nd, 3rd and 4th time homebuyers.

Not the money itself, just the concept. I’m amazed by how many Listing Signs, Agent MLS remarks and Brokerage Office Signs are screaming out $8,000 Tax Credit!! If I didn’t know better, I would think it was the National Association of Realtors, not the United States Congress, that came up with this idea and told all of its member lackeys to shout it from the rooftops.

Prior to the tax credit, Realtors appropriated, and then seemed to take credit for, interest rates . “Why wait, rates area great” signs were everywhere.

It’s all too true though, isn’t it? Rates are great and the Tax Credit is an incredible deal that expires soon. Look over there < on the left and you’ll see I added a countdown timer.  Now you Know exactly how much time you have until the tax credit expires (You must have closed on your house By end of day on November 30, 2009)

Congress, however, is considering an extension and even as you read this bills to extend the maximum $8,000 tax credit for first-time home buyers are pending in both the U.S. House and the Senate. Sen. Christopher Dodd, chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.

I DO think it will be extended, maybe through next year from what I’m hearing but I don’t think it will be increased.

Using the idea of Bexley’s renovations as the central theme, unique and historical homes and gardens in Bexley will be featured at both an invitation-only Gala on Saturday evening and a ticketed tour on Sunday. Proceeds from the event will support the efforts of the Bexley Women’s Club to provide scholarships to high school seniors who reside in Bexley and undergraduate students nationwide. Over the last 70 years, the BWC has supported more than 700 students with over $300,000 in scholarships.

As I type, there are 108 (!) active single family listings in Bexley ranging from $99,000 to $3,499,000, averaging 2679 square feet and $165/sq ft.  There are 23 homes in contract at the moment, averaging $150/sq ft. One home, 2795 E. Broad, is in contract but it’s contingent on a home sale.

To date this year, 29 single family homes have sold with an average sales price of $357,686 or $144/sq foot. Today’s Bexley market is very active. Lots of listings, but buyers are out there looking. The Sales Price to List Price ratio so far this year is running very close to 100%.

The more you look, the more you learn about the mini-real-estate-markets you’re interested in.  You begin to get an idea of what an extra $20,000 (about $110/month more) might get you in regard to square feet or location. You begin to see the price difference between the 3 bedroom Clintonville Homes and the 4 Bedroom Clintonville homes. You understand how valuable two full baths really are in Grandview.

The best way to search is to contact me and ask me to set up a home search web site for you. It’ll only produce homes that meet your specific criteria that are active on the market. Nothing else. In one place at one time. It’s the way to go.

But, if you’re still casually looking and maybe you aren’t yet sure about exactly what your search criteria are, you might like Dwellicious.   In December I beta-tested the site and it went live in January of this year. It’s a great way to share homes you run acroos with your husband, wife, life partner, fiancee, kids, parents, whomever.

The best part is that it  works on many of the most popular home search sites — Realtor.com, Trulia, Coldwellbanker.com, etc, etc. Soon, I hope it will work on DeliciousRealEstate.com, but for now, they’re working on it.

I have posted a link on the right side-bar so you can check it out any time. Watch the video for a wonderful explanation:

Dwellicious Screencast Part Deux! from Greg Robertson on Vimeo.

The level of savings depends on your levels of satisfaction - with the home, the neighborhood and the lot.

You could ask an informed Realtor, for starters. Typically, a Realtor could do a little research and tell you what similar homes have sold for in this or that neighborhood, what neighboring homes might be in contract at what price and what nearby homes on the market are listed for.

Not just any homes though, you have to be smart about such things. Look at the real numbers, look into the numbers and talk about the market. Ask Questions. Don’t take your Realtor’s word for it.

How much work does it need? Can you do the work? Do you have people you know who could do the work? Can you live in the house in its current condition? How long would you live there? Would you rent it or sell it when you leave for your next house? Are you considering flipping this house? Are you flipping crazy?

Let’s take a look at this house listed at $149,900 on Hunter Ave in the Short North area.  It’s about 8 homes south of 5th Avenue, across the street from the city’s aquatic center and Thompson Rec Center and a quick walk to all the Short North Hoopla available on High Street in the Long North.

That price at that location has drawn lots of visits but, last I heard from the listing agent, no offers.  It came on the market last August listed at $234,900 and has dropped somewhere between $10K and $19K every month.  It sold for $181,000 in March of 2006.  It needs work.  Depending on your needs and tastes, anywhere from minimal work to make it livable to weeks worth of renovation.

When you buy a foreclosure, there are a lot of unknowns.  These unknowns typically add up to an expensive laundry list of items to be fixed. Tack that on to your already knowns–this house could use some bathroom fixtures, some drywall work, all appliances, a new AC compressor to replace the one that was stolen and a paint job on the outside, to name a few.

Walk around it, walk through it, it feels quick and shoddy. It probably won’t come crashing down around you, but it’s not the level of workmanship you would hope for. It’s also listed at $149,000. It’s bank owned and the bank wants to sell it. Do you think there’s some built in equity there with the potential for renting later? I do. Add on $8,000 in Stimulus money for first time buyers and various other buyer program help and you may have a winner in a neighborhood that you thought you couldn’t afford the first time around.

Added Bonus — The Dairy Family has a great beer selection just down the street on 5th Ave.

Fannie Mae, Freddie Mac plan big fee increases

Avoid these increases by getting a conventional or FHA loan

Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1.

In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.

Under the new guidelines:

• Buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score;
• Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on;
• Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.

Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees “default at four-to-eight times” the rate of other mortgages backed by Freddie. “We have to manage these risks appropriately,” he says.

Here is a quick re-cap on the Stimulus Plan and how it relates to Central Ohio home buyers in comparison to last Summer’s Plan: