It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any questions that fall outside the situations here, give me a call and if you do not have an accountant to speak with, I can refer you to one.

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Denver ranked No. 39.

In its “Metro Monitor” report, released this week, the Brookings Institute assessed how the recession has affected big-city employment, wages, gross metropolitan product, housing prices and foreclosure rates.

The primary conclusion was that the recession has had very different impacts on cities. As a result, an economic recovery will likely vary from region to region or city to city.

“All metropolitan areas are feeling the effects of this recession, but the distress is not shared equally,” Alan Berube, research director of the Metropolitan Policy Program at Washington-based Brookings and co-author of the report, said in a statement.

“While some areas of the country have experienced only a shallow downturn, and may be emerging from the recession already, people living in metro areas that are now performing weakest economically should prepare themselves for a long recovery period,” Berube said.

The overall rankings were based on four factors:

Change in employment from the peak quarter to the first quarter of 2009.
Change in the unemployment rate from March 2008 to March 2009.
Change in gross metro product from the peak quarter to the first quarter of 2009.
Change in housing prices from Q1 2008 to Q1 2009.
Colorado Springs showed a 3.9 percent drop in unemployment from the peak quarter to first quarter 2009. The unemployment rate increased by 3 percent. The gross metro product fell from the peak quarter by 2.1 percent and housing prices declined by 0.9 percent on a year-over-year basis.

Source:  Colorado Springs Business Journal

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Academy Boulevard and Airport Road: Water main work on Academy Boulevard at Airport Road. Traffic on Academy Boulevard will be restricted to two through lanes in each direction. Businesses and residential access will remain open during the roadwork.

Northbound I-25 between Rockrimmon Boulevard and N. Nevada Avenue: Left lane and shoulder closed for concrete repairs.

Westbound US 24 at Peterson Boulevard: All westbound lanes closed for bridge deck repairs and paving.

For more information on Colorado Springs-area roadwork, go to www.pikespeakrta.com, www.cosmixproject.com or www.dot.state.co.us.
Other work in the city
Overlay and paving work from 6 a.m. through 6 p.m. today through Thursday: Red Cedar Drive from Eastmeadow Drive to cul de sac; Leewood Court from Glenhurst Street to cul de sac; Teal Wood Court from Glenhurst Street to cul de sac; Purple Sage Court from Glenhurst Street to cul de sac; Glenhurst Street from Eastmeadow Drive to Valley View Street; Meadowdale Place from Valley View Street to cul de sac; Valley View Street from Eastmeadow Drive to dead end north; Meadow Ridge Drive from Rangewood Drive to Austin Bluffs Parkway.

Asphalt repair work from 6 a.m. through 6 p.m. today through Thursday: Kyle Lane at Welsh Circle; Constitution Avenue at Powers Boulevard; Spurwood Drive at Vickers Drive; Allegheny Drive at War Eagle Drive; Brigatine Drive at Windjammer Drive.

Concrete repair work from 6 a.m. through 6 p.m. today through Thursday: Midsummer Lane at Serendipity Circle; Spurwood Drive at Vickers Drive; Brigatine Drive at Windjammer Drive; Chaseglen Drive from Broadmoor Bluffs Drive to Farthing Drive; Songglen Drive from Chaseglen Drive to Chaseglen Drive; Spiceglen Drive from Songglen Drive to Songglen Drive; Echoglen Drive from Chaseglen Drive to cul de sac; Coveglen Court from Chaseglen Drive to cul de sac; Fernglen Court from Chaseglen Drive to cul de sac; Robinglen Court from Chaseglen Drive to cul de sac west; Maroonglen Court from Chaseglen Drive to cul de sac west; Maroonglen Court from Chaseglen Drive to cul de sac east; Danceglen Drive from Farthing Drive to Farthing Drive; Buckeye Drive from Pebble Way to Buckeye Court; Wycliffe Drive from Star Ranch Road to Broadmoor Bluffs Drive; Becket Drive from Wycliffe Drive to Broadmoor Bluffs Drive.

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Today is the last day to appeal your property value resulting from the 2008 reappraisal.

The El Paso County Assessor’s Office reports fewer appeals have been filed than expected, which is surprising because the reappraisal resulted in a good number of homes being valued higher than the previous reappraisal despite a plunge in values during the last year.

Property values were higher than some might expect because the reappraisal period spanned Jan. 1, 2007 to June 30, 2008, a time frame that preceded the biggest dive in market values.

Appeals of values must cite evidence from the reappraisal time period. The values are used to calculate property taxes. Most people who appeal are seeking to have their property values decreased to keep their property tax liability from rising.

The Assessor’s Office, at 27 E. Vermijo Ave., will be open until 5 p.m.

 Source: www.gazette.com

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The county’s mix of racial and ethnic minorities stayed roughly the same. The two largest minorities, blacks and Hispanics, make up 7 percent and 13 percent of the population, respectively. Hispanic origin is treated separately from race, so a Hispanic person can also be a member of any race. Overall, racial and ethnic minorities make up 26 percent of the population, up from 23 percent in 2000.

The Census Bureau’s estimates are for July 1, 2008. They offer a breakdown of sex, race, age and Hispanic origin for every county nationwide. For a database with details on every county, check www.gazette.com/sections/infocenter/census. Some other findings from the latest estimates:

• El Paso County is still slightly smaller than Denver, a combined city and county that has an estimated 598,707 residents.

• Among other large-population counties in Colorado, minorities make up 44 percent in Adams, 20 percent in Boulder, 49 percent in Denver, 14 percent in Douglas, 20 percent in Jefferson, 15 percent in Larimer, 16 percent in Mesa, 44 percent in Pueblo and 31 percent in Weld.

• El Paso County’s population of people age 65 and older increased 28 percent since 2000, much faster than the general population. That age group now includes an estimated 57,160 people.

• Among nearby counties, the population in Teller was estimated at 21,661, in Fremont at 47,283 and in Pueblo at 156,737.

Source: www.gazette.com

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The index level is almost now back to where it was last summer, which was just before panic and paralysis set in and the index fell off a cliff to levels never before recorded. With the recovery in the index over the past two months led by the forward-looking component, the big question now is whether the increasingly widespread expectation that economic recovery is just around the corner will be fulfilled or dashed. Our belief remains that what we are seeing in these (and most other) data is a shift from “end of the world” readings to those that more closely approximate something seen in a regular economic slump. We do not think that conditions are going to progress in a straight line up from here, and our forecast remains that the road to recovery will be a longer and more difficult journey than most believe at the moment. –Joshua Shapiro, MFR Inc.
Although the index is still low in absolute terms, it is at its highest level since September, and the 30-point increase over the last three months is the largest three-month gain on record. Sharp gains in confidence typically occur right at the end of a recession. These gains are due to jumps in expectations, which is also what is happening now. –Abiel Reinhart, J.P. Morgan
This is a much bigger jump than we expected… Even so, if the new level is maintained the Conference Board index is consistent with real spending growth of less than 1%, which is not much of a green shoot. –Ian Shepherdson, High Frequency Economics
That was the biggest one-month improvement in the index in more than 6 years and reflected mainly a big 22.3 point gain in the index measuring expectations about the outlook. Consumers also assessed current conditions a bit more favorably, but that part of the index remains quite low… The improved mood of consumers is encouraging. If the job market stabilizes, the improvement in confidence could translate into more spending and make the better outlook a self-fulfilling prophecy. –Nomura Global Economics
This is another strong report in favor of the U.S. consumer, and we will take good news where we can. However, we cannot lose sight that the trend is key, and given that the index continues to sit in historically low territory (note: average index value has been 95 since 1977) should temper the immediate implications of this report. –Ian Pollick, TD Securities
The May consumer confidence report is another indicator that suggests that the recession’s grip on the economy has slackened significantly and that the recession may be drawing to a close. While the labor market indicators still point to significant job losses, both the jobs components of this report and the weekly data on initial jobless claims suggest that the peak rate of job loss is now behind us. –RDQ Economics
The level of confidence still remains low. Much of the weakness is due to accelerating job losses, deepening house price declines, soaring foreclosures, tighter credit standards, and financial market volatility. Confidence is still mired in recessionary territory although consumers are not as depressed as they were earlier in the year. –Stephen A. Wood, Insight Economics
Compiled by Phil Izzo

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So if you’re looking for some new ways to wow your friends, pull up a lawn chair and fire up your grill as we bring you the best of barbeque, Colorado Springs-style.

BBQ University at the Broadmoor

If you’re crazy about barbeque and looking for a smokin’ hot culinary adventure, Rocky Mountain style, then the Broadmoor’s BBQ University is the place for you.

For the second year in a row, Steven Raichlen, the country’s reigning master of barbeque, will offer a three-day, three-night grilling school, touted by the Food Network as “the best BBQ experience in the U.S.”

Held on the deck of the Cheyenne Lodge, with its breathtaking views of the front range, 50 lucky students can fire up one of 25 grills and learn different grilling techniques from the master.

“Every day you’ll learn eight recipes for one meal all taught to you on the grill – from appetizers through dessert,” says C.W. Craig Reed, Foor and Beverage Director at the Broadmoor.

And you’ll do the cooking.

Everyone plays a part in preparing the menu – from readying the grill to prepping the food.  Then at the end of each class, both students and teacher sit down to a barbeque feast.

Students may arrive as strangers, but they leave fast friends.

“The interaction that takes place between total strangers is phenomenal,” Reed says.  “They all trade their grilling secrets and exchange emails after the class is over.”

The class is so popular, in fact, that of the 80 students enrolled last year, almost half are returning this year.

And, at the end of three days, you’ll be a grilling rock star.  What could be better?

For more information or to make a reservation for the June 14-17 session, please call The Broadmoor at 634-7711 or visit www.broadmoor.com.  Special rates available for local residents.

 

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Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors®.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and is 1.1 percent higher than March 2008 when it was 83.7.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”

NAR’s Housing Affordability Index2 remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”

A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

1The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

2The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for April will be released May 27; the next Pending Home Sales Index will be on June 2.

Information about NAR is available at www.realtor.org.

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ADP says there were 31% fewer private sector job losses in April, while outplacement firm says pace of layoffs slows.

NEW YORK (CNNMoney.com) — The pace of U.S. job losses may be slowing, according to two private reports released Wednesday.

Automatic Data Processing, a payroll-processing firm, said private-sector employment decreased by 491,000 in April, a 31% improvement from the revised 708,000 drop in March.

Economists surveyed by Briefing.com had expected a loss of 643,000 jobs last month.

The report, which is based on payroll data from 500,000 U.S. businesses, showed the number of job cuts declined across all sectors in the survey.

“There’s a sense here of a turn, which is good news” said Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC. But the job market “is likely to decline for at least several more months, although perhaps not as rapidly as during the last six months.”

Separately, outplacement firm Challenger, Gray & Christmas Inc. reported that the number of layoffs announced in April fell for the third straight month.

Job cut announcements by U.S. employers totaled 132,590 in April, an improvement of 12% from March’s 150,411 cuts. It was the lowest total since last October, according to Challenger, but the April figure was still 47% higher than job cuts announced in the same month a year ago.

The government/non-profit sector was hit the hardest for the second month in a row, Challenger said, with 27,624 announced job cuts in April. The automotive industry had the second highest tally of planned cuts, thanks in part to further cuts announced at General Motors.

“Job cuts are still at recession levels, but the fact that they are falling is certainly promising and may suggest that employers are starting to feel a little more confident about future business conditions. Hopefully, the next few months will bring further relief, as we tend to see downsizing activity slow during the summer months,” John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.

Employers have announced 711,100 job cuts so far this year. That is 145% percent higher than the 290,671 job cuts announced in the first quarter of 2008, Challenger said.

The reports set the tone for the government’s monthly jobs report due Friday. The Labor Department report is expected to show that the economy shed 620,000 jobs in April, less than the 663,000 reported for March, according to a consensus estimate of economists complied by Briefing.com. The unemployment rate is predicted to rise to 8.9% from 8.5%.

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