Reprint of article by Amy Hoak, MarketWatch

CHICAGO — Many of this year’s first-time home buyers will get an extra perk: a tax credit of up to $8,000 that can be claimed on their 2008 taxes. The option to claim the credit now instead of next year puts cash in the hands of eligible buyers soon after they’ve committed to one of the biggest purchases they’ll ever make.

To get the funds as soon as possible, those who have already bought in 2009 have it easy: They simply claim the purchase when doing their 2008 taxes this season. It’s a refundable credit, so after it’s applied to any taxes due, taxpayers get a check for the remainder.

But if you haven’t closed on a home yet — and intend to before Dec. 1 — you have a few options to claim the credit:

• File an extension: This is the speediest way to get your refund, said Ed Smith, a partner in the Boston office of BDO Seidman. An extension gives taxpayers until Oct. 15 to file. If they file electronically, they can receive their refund within 10 days if they use direct deposit, according to the Internal Revenue Service. Remember, even when you get an extension, any taxes owed must be paid by April 15. “If you underestimate, you could be faced with interest and penalties,” said Mark Luscombe, principal tax analyst at CCH, a provider of tax, accounting and audit information, based in Riverwoods, Ill.

• Amend your return: If you’ve already filed your taxes for 2008 and then purchase a home this year, it isn’t too late to claim the credit for 2008. Those planning on buying a home soon can file an amended return later, after the purchase. But prepare to wait longer for your funds to arrive, Smith said.

• Wait until next year: You can also wait to claim the credit on your 2009 taxes. In some scenarios, it might make more sense to wait. For instance, if your income makes you ineligible for the full credit in 2008, but you’re going to make less in 2009, it’s worth it to use the credit on your 2009 return. “If your [household] income was too high in 2008, but one person had their job cut… you might qualify in 2009,” Smith said.
With this credit, eligible homeowners can claim 10% of the purchase price of the home, up to $8,000, or $4,000 for married individuals filing separately. See form 5405 on IRS.gov.

Unlike the previous home-buyer tax credit in effect for people who bought a home in 2008, the one outlined in the American Recovery and Reinvestment Act of 2009 doesn’t have to be paid back over time. “Before, it was an interest-free loan. Now it can be a real savings,” Smith said.

Do you qualify?

As of March 6, almost 568,000 tax returns claimed a first-time home buyer credit, totaling more than $3.9 billion of the $13.6 billion allotted for the program, according to the Treasury Inspector General for Tax Administration, which audits the IRS.

The 2008 form for the credit is both for people who bought in 2008 (and are eligible for the credit that needs to be repaid) and those who bought in 2009 (and don’t have to repay the credit).

Not all of those claims will be honored.

“For 38,158 of the 567,685 claims, we identified that the taxpayer may have had ownership in a personal residence within the last 3 years, which disqualifies the first-time home buyer credit claim,” the Treasury Inspector General said in a report on the 2009 filing season.

To qualify for the credit:

• A homeowner must not have owned a principal residence in at least three years.

• For married taxpayers, both spouses must not have owned a home in the previous three years. “If one spouse wouldn’t qualify, then neither qualifies,” Luscombe said.

• The amount of the credit starts phasing out for taxpayers who have a modified adjusted gross income of more than $75,000, or $150,000 for joint filers.

• But the credit is reduced to zero when modified adjusted gross income reaches $95,000, or $170,000 for joint filers.

• The home must be the taxpayer’s primary residence.

• The taxpayer can’t acquire the new home from a relative, including a spouse, parents, grandparents, children or grandchildren.

Frequently asked questions about the tax credit can be found at the National Association of Realtors’ and the National Association of Home Builders’ Web sites. See NAR’s site. See NAHB’s FederalHousingTaxCredit.com. Also, visit the IRS’s first-time home-buyer page.
Pay back

Remember that if you bought a home between April 8, 2008 and Dec. 31, 2008, you’re only eligible for the previous tax credit — one that will require you repay the government over the course of 15 years.

New homeowner Steve Cline, for example, bought his Etters, Penn. home in 2008 and is getting a $7,500 credit that has to be paid back. In hindsight, he wishes he would have waited several more months to buy his home. And he’s certainly not alone.

But even if you bought in 2009, there’s a chance you’d also have to pay the credit back. According to the IRS, if you sell your home in three years or less after the date it was purchased, some or all of the credit has to be paid back at the time of sale.

If you work with a tax adviser and will owe funds due to the sale of your home, it’s probably best to get in touch with that adviser as soon as the sale closes, said Cynthia Jeanguenat, an enrolled agent in Virginia Beach, Va.

“Let them know what is happening in your life so you know where you stand before next tax season,” she said.

Copyright © 2009 MarketWatch, Inc.

Rates on 30-year mortgages fell recently to the lowest level on record after the Federal Reserve launched a new effort to stimulate the struggling U.S. housing market.

Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dropped to 4.85% last week, from 4.98% the previous week. This was the lowest in the history of Freddie Mac’s survey, which dates back to 1971, and was down a full percentage point from a year ago. These are truly historic times and they present a great opportunity to anyone who is thinking of buying.

If you, or someone you know, is ready to take advantage of historic low prices and historically low interest rates, please call me toll-free (1-888-494-8654) or email me your referral.

2009 is a great year to buy real estate in Myrtle Beach. Don’t let this opportunity pass you by.

Buying opportunities for first-time home buyers in Myrtle Beach have never been better. Prices and interest rates are low; there is a wide selection of homes to choose from; and Congress is giving first-time homebuyers an added incentive – an $8,000 tax credit.

Twenty-three percent of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first-time home buyers, according to a survey commissioned by Move Inc., the operator of National Association of Realtors’ Realtor.com Web site.

Despite today’s challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit.

So… are you ready to make the move? You might be, if you:

1. Are familiar with the market. If you’ve been paying attention to how much houses are listed for in the neighborhoods you’re eyeing and have a realistic view of how much a house will cost you, you’re in good shape. But if you’re dreaming about that big corner house with no clue about its asking price, you may want to spend some more time becoming familiar with the market and how much houses are going for.

2. Have the money for a down payment and closing costs. The down payment is a percentage of the value of the property. Freddie Mac says the percentage will be determined by the type of mortgage you select. Down payments usually range from 3 to 20 percent of the property value. Also, you may be required to have Private Mortgage Insurance (PMI or MI) if your down payment is less than 20 percent. Closing costs include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other settlement costs. You can expect to pay between from 2 to 7 percent of the property value. Generally, buyers will receive an estimate of these costs from your lender after you apply for a mortgage.

3. Know how much you can afford. Freddie Mac says that as a general guide, your monthly mortgage payment should be less than or equal to a percentage of your income, usually about a quarter of your gross monthly income. Also, your income, debt and credit history go into determining how much you can borrow. As a general rule, your debt — credit card bills, car loans, housing expenses, alimony and child support — should not be more than about 30 to 40 percent of your gross income.

4. Know what additional expenses will come with owning a home. This includes homeowner’s insurance, utility bills, and maintenance costs — roofing, plumbing, heating and cooling.

5. Have your credit in good shape and make sure your credit report is accurate. Potential lenders will view your credit history — how much debt you’ve accrued, how many accounts you have open, whether your payments are made on time, etc. — to determine whether they’ll give you a loan. You should get a report from each of the three credit reporting companies: Equifax, Experian, and Trans Union.

6. You haven’t made any recent major purchases, particularly a vehicle. If you do, you may have a harder time getting a loan — or it could potentially lower the amount you’ll be approved for.

2009 is a terrific time to buy property in Myrtle Beach, especially for first-time home buyers. If you are planning to purchase a home this year, check out my free “Guide for First-Time Home Buyers.” It has all the information you need to get you started. Click here to order.

Resources: Move.com and Realty Times

Reported in The Sun News by Jessica Foster

People who think the Myrtle Beach housing market is bad should take a look at San Francisco or Miami.

The Myrtle Beach market, despite declines in home prices and sales in 2008, has ranked among Builder magazine’s top 15 Healthiest Housing Markets for 2009, while areas of California and Florida frequented the list of the weakest markets.

Myrtle Beach was in the No. 15 spot in large part because of its population growth, the magazine said. Many retirees are lured by the prospect of living near the ocean and the vast golf course options, it said.

“Though permit activity dropped sharply last year, Myrtle Beach remains one of the hottest markets in the country, especially when you analyze the number of permits pulled per resident,” according to the magazine.

The magazine teamed with Hanley Wood Market Intelligence to come up with the lists by looking at building permits, home prices, job creation and population trends.

“It’s all relative,” Boyce Thompson, the magazine’s editorial director, wrote Tuesday in an e-mail. “We publish our list of the weakest markets today, and it’s a bloodbath. Myrtle Beach stands out in comparison. Population growth has been strong there compared to the rest of the country. When you have people moving in, they need a place to [live].”

The top market of the 75 that were analyzed was Houston, and the weakest was Detroit.

This is a monumental piece of legislation that will directly affect the housing market. I want to share my insights on how I believe it will affect the market so that you can make informed buying and selling decisions.

Homebuyers: Part of the stimulus package gives first-time homebuyers who purchase in 2009 an $8,000 tax credit. “First-time homebuyer” is defined as someone who has not owned a home for the past three years. Combined with the fact that foreclosure filings during January decreased 10% from December 2008 and that some sales in December of 2008 rose 6.5%, we will see prices at the lower end of the price spectrum stabilize. The really great deals will likely be snapped up in the next few months and we should see a price increase in December of 2009 as those who wait will rush to buy before the $8,000 credit is gone.

This will also help clean up some of the problem loans, short sales and foreclosures that have been a drag on home prices.

Three to six months from now we will see this start to move up to a little higher price range and by the end of the year, prices will stabilize in large mid-priced homes. High-end homes will be the last to stabilize sometime in 2010.

If you are thinking about buying, now is the time. Don’t wait and end up wishing you had taken advantage of this opportunity.

Home sellers: If you are selling in the lower price ranges, you can expect to see increased activity and, if your home is reasonably priced, you will get it sold very close to that price.

If you are not at the low end of the market, and do not have to sell, my advice is to wait twelve to eighteen months, you will get a better price. If you have to sell now, price it right and get it sold now as we could still see a drop in value in the mid and high-end price ranges over the next 3 to 6 months.

If you want to talk further about the impact of this stimulus package, give me a call (toll-free: 1-888-494-8654) or drop me an email about your situation and I will give you my recommendation. Also check back here on a regular basis for updates on what is happening in our real estate market.

Myrtle Beach made Southern Living’s reader’s choice list as the No. 2 overall beach and family destination. Orlando, Florida took the top spot for best family destination, and Destin, Florida received the most votes for the best beach destination.

Southern Living, a lifestyle magazine, largely covers Southern food and homes.

Click here for link to all “Readers’ Choice Award Winners.”

Click here for link to Myrtle Beach Family Guide and slide show..

In 2008, selling prices of Grand Strand homes posted their steepest declines in at least 15 years, according to year-end stats provided by the MLS. The declines show just how much sellers have been willing to slash prices - and are evidence of bargains out there for buyers.

The Bad News: MLS stats for 2008

• Single-family home prices fell 5 percent from 2007
• Single-family home sales fell 32 percent in 2008
• Condo prices fell 23 percent from 2007
• Condo sales fell 36 percent in 2008

The Good News: Silver lining for patient buyers

The decline last year brings prices about back in line with what they were in 2005, said Tom Maeser, market analyst for the Coastal Carolinas Association of Realtors.

The number of homes for sale is also on the downswing, a good sign that supply is starting to get back in line with demand, Maeser said. The number of homes on the market fell from 13,484 at the end of 2007 to 12,801 at the end of 2008.

The price declines have been necessary to get buyers to bite and to help sell excess inventory, said Coastal Carolina University research economist Don Schunk.

His forecast calls for the housing market to start stabilizing in the second half of this year as low mortgage rates spur people to buy homes, as economic stimulus efforts from the new presidential administration take effect and as inventory gets eaten up.

“That’s not saying that 2009 is going to be a banner year by any means,” Schunk said, “but toward the end of this year, the declines should be slowing.”

Resource: Jessica Foster, The Sun Times, Myrtle Beach

Here are excerpts from an article in The Sun News written by Lisa Fleisher and Jessica Foster – click here for full article. By all accounts, 2009 looks like a slow year… recovery not expected until 2010.

Here’s a look at the nine issues to keep an eye on this year:

Unemployment

One of the basic building blocks of the economy is continuing to crumble this year as people keep losing jobs.

Unemployment affects Myrtle Beach in two ways: More tourists are out of work, meaning they can’t spend many nights or as much money on vacation here. That, in turn, means there will be fewer jobs to be had on the Grand Strand.

And even if the economy starts getting better, people will continue to lose their jobs, and unemployment will continue to rise all year.

Gas prices

After a year during which gas prices rose to seemingly impossible heights, then crashed, observers think prices should stay relatively stable, at least through the first half of this year.

Hard Rock Park

The rock ‘n’ roll theme park’s fate is still up in the air, and it’s unlikely anyone will open the park in 2009.

An auction to sell the park for a minimum of $35 million failed, and the park is still looking for a buyer. The 55-acre park closed in September and filed for Chapter 11 bankruptcy after a disappointing first season.

Interstate 73

The long-planned interstate has a few chances to get federal funding this year.

Myrtle Beach I-73 boosters, who want a highway to connect the Strand to Michigan and all the tourists in between, are trying to see if there is any money available through any stimulus package that might be passed by the Obama administration and the 111th Congress.

More likely, perhaps, is for money to come from a highway funding bill that is supposed to be renewed this year.

State budget

The state government will have another difficult budget year, cutting funding to a number of services, freezing open job positions and even laying people off or asking them to take unpaid leave.

Economists are starting to worry now the government will have to look at raising other taxes, such as sales tax or property tax, especially on commercial property and second-home owners.

The real estate market

Housing market woes could ease toward the end of 2009 or in early 2010, experts say.

That’s when low mortgage rates, efforts to loosen lending and dwindling inventory levels could help stop the freefall seen in 2008 in home sales and prices.

“I hope we’re back to the 5 percent per year appreciation that we grew to know and love in 2010,” said Chris Fuse, president of Grand Strand Appraisers Inc. “I think it’s going to take 12 months for the new administration to put their fingerprint on the economic catastrophe that we’re experiencing and to build consumer confidence again.”

Banks

Grand Strand banks could face another tough year in 2009, but most have enough capital to weather the storm, experts said.

One of the problems that banks along the coast will have to deal with is growing their loan portfolios in a market where a major source of loans - the real estate market - is suffering a downturn, said Tony Plath, associate finance professor at the University of North Carolina at Charlotte. Plus, interest rate cuts are putting a damper on banks’ interest margins, or the difference between what it collects on loans and what it doles out on deposits.

Inlet Square mall

The Murrells Inlet mall’s owner, Inlet Retail Associates, defaulted on the loan it got to buy and renovate the shopping center, meaning the mall could be sold, go into foreclosure or the mall’s owner could file for bankruptcy, the lender’s attorney Rick Mendoza said in September.

The mall was in the middle of a $4.5 million renovation project when it ran into financial troubles, and crews stopped work in November 2007, leaving the job only partially finished.

Some of the companies that worked on the renovation are still in the dark about whether or when they will get paid.

Consumer prices

One bright spot for 2009 is the likelihood that price inflation will ease on many items in stores.

Already in November, the Bureau of Labor Statistics’ consumer price index fell 1.7 percent on a seasonally adjusted basis from October levels, fueled by declines in energy and transportation costs. The price index, however, remained 1.1 percent higher than in November 2007 and the food price index was 5.9 percent higher.

Consumer prices [are expected] to be flat in 2009 because retailers won’t have to raise prices like they did in 2008 to keep up with skyrocketing energy and transportation costs.

The prices of apparel and electronics will likely dip the most as retailers slash prices to lure shoppers. Food costs should stay about the same.

The Main Street Connector will be open for traffic as early as July 2009, but not later than Fall of 2009.

Greg Tuttle, site manager for bridge contractor Cape Romain, said that the Main Street Connector will be turned over to SCDOT for traffic in July 2009, according to a report by Jim Hulen, North Myrtle Beach Online.com .

Tuttle said, “The bridge is 71% complete. We put the last beam in place yesterday [December 15th]. There will be no lengthy blockage of the waterway from here on out. We will only be moving cranes.”

Bill Haley, SCDOT regional office, said they are hoping to have the bridge open in July but, making allowances for weather and other causes for delay, it could be Fall of 2009 but, despite some local news report, he could not foresee the opening being as late as into 2010.

The bridge has a total span length of 230 feet.

Source: North Myrtle Beach Online.com

THINKING ABOUT REFINANCING your home or investment property? I certainly am, and I’m not alone. Many people are considering refinancing because of the lower interest rates currently being offered by lenders. But I don’t want to get my hopes up too high, since I may not qualify.

Refinancing applications increased by 208% over the Thanksgiving holidays according to the Mortgage Banker Association. The dramatic increase was prompted by the lower interest rates being made available since the Federal Reserve decided to get involved in the mortgage mess.

The average rate for 30-year fixed-rate mortgages decreased to 5.47 percent from 5.99 percent, and points decreased to 1.16 from 1.23 for 80 percent loan-to-value (LTV) ratio loans, the MBA reported. Some mortgage experts even predict that rates for conventional, conforming loans will go as low as 5 percent by the end of the year.

THE PROBLEM IS: many people won’t be able to take advantage of these low rates because of tightened underwriting standards. And the standards keep changing from week to week. People with borrowing power one week can lose it the next week because of these changes.

So let’s check it out. I own an investment property with a 5-year, fixed-rate, interest-only mortgage due March, 2011. I’d like to take advantage of the lower rates and convert the loan to a conventional 30-year, fixed-rate mortgage. I also want to lower my monthly payments. Hey… you don’t ask, you don’t get.

I’ll start calling lenders this week to see what they can do for me. It may take a while, since we are moving into the holiday season, but I’ll let you know what I find out. Stay tuned….

Resource: Inman News, Thursday, December 4, 2008.

MYRTLE BEACH: Banks and developers are trying to improve their 2008 balance sheets by selling their properties at cut rate prices. Banks don’t want to be in the real estate business and developers don’t want to carry unsold property into the new year. Banks are trying to cut their foreclosure losses and developers are offering deep discounts and incentives to reduce their inventories – all by year end. Who benefits from this?

You benefit - if you are a first-time home buyer, a cash buyer, or a buyer with terrific credit. There is something for everyone – single family homes, golf and oceanfront condos, and townhomes. But make sure you have your finances lined up before you make an offer. The best properties sell quickly even in this market. One new foreclosure in my neighborhood – Barefoot Resort – sold in three days.

So what kind of deals are we talking about? Click here for some examples.

CONTACT ME - I’d be hhappy to help you find what you’re looking for.

“It’s an ill wind that blows nobody any good.” John Heywood, 1546

OUR CURRENT FINANCIAL CRISIS and the resulting real estate melt down has certainly been an “ill wind.” Just ask an investor who bought property in Myrtle Beach a couple of years ago. Some of them have lost all their equity and then some, and are struggling to keep up with negative cash flows as the rental market slows down over the winter months.

Some investors haven’t made it and are now in foreclosure. And that’s bad news for everyone involved, including the lenders who are trying to get these “bad loans” off their books as quickly as possible. Lenders don’t want to hold on to property for a year or more until the market stabilizes.

SO WHERE’S THE “GOOD?” Investors with cash or great credit are looking at Myrtle Beach again and finding deeply discounted property. The increase in foreclosures has driven prices to bargain levels. In today’s market, some lenders have become highly motivated sellers.

Nevertheless, buyers still need to do their homework, comparing prices and selecting the best from all the rest. Savvy investors have their financing lined up in advance, know a good deal when they see it, and are prepared to make an offer. The best deals go quickly even in this slow market.

WHEN WILL THE MYRTLE BEACH REAL ESTATE MARKET BEGIN TO RECOVER? That’s anyone’s guess, but it will take a while.

It’s a matter of supply and demand. When foreclosures and developer discounts run their course, excess supply will be reduced and the market will begin to stabilize. When lenders start relaxing their lending practices, more buyers will qualify for loans and the market will begin to stabilize.

Until then, only a few buyers will be able to take advantage of today’s foreclosure market – first time home buyers, and buyers with cash or great credit. If you think you might qualify, call me, toll free, at 1-888-494-8654. I’d be happy to help you find a real deal in this market.

Resource: Jessica Foster, The Sun News, Myrtle Beach

What’s your opinion of the government’s $700,000,000,000 bailout of the financial markets? Have you ever seen so many zeros in a dollar figure? Probably not, unless you’re a member of Congress. Here’s your chance to express your opinion.

Simply type it in the comment box and I’ll post it within 24 hours. Please keep it PG and pithy.

Here’s what others are saying:

• Barry Goldwater Jr expressed his opinion to Neil Cavuto and ended with this line re: Your dog and your food.

• The National Association of Realtors sent their comments in to The Wall Street Journal: “The Senate’s bold action will help the country emerge from the current credit crisis and put the economy back on its way to improved financial and housing stability.”

• SC Senator Jim DeMint voted against the bailout and made these remarks on the floor of the Senate: “I just do not believe that this bill gets the job done. In fact, in the long term, I am convinced it will do more harm than good.”

• SC Senator Lindsey Graham voted for the bailout and offered these comments: “I remain committed to making sure the root cause of the problem - mortgages being given to people who never should have had them - does not happen again.”

What’s your opinion? Type it into the message box below and I’ll post it within 24 hours.

HARD ROCK PARK in Myrtle Beach has closed its doors for the winter season and filed for Chapter 11 bankruptcy protection after a disappointing first season.

Hard Rock Park cited several reasons for closing:
• Downturn in consumer discretionary spending due to high gas prices and the weak US economy.
• Lack of an out-of-market advertising budget due to the tight credit market.

Others cite Hard Rock Park’s:
• Relatively small size – 55 acres
• Comparatively few rides
• High per-person admissions price

Hard Rock Park owners plan to take time off hoping to reorganize and reopen in April, 2009.

News of Hard Rock Park’s closing and bankruptcy filing has left some folks wringing their hands:
• It “could be bad for Myrtle Beach’s reputation and cause companies to think twice about relocating here.”
• “Clearly, having a high-profile business fail, particularly in its first year, will raise some eyebrows and more than a few questions from other companies that might have been considering investing in the Grand Strand….”
• Hard Rock International is attempting to disassociate its successful café chain operation from the park’s problems. The cafe company licensed its brand name to the park but does not have any investment or ownership stake.

Other folks predict a Hard Rock Park turnaround:
• “If anybody can, those guys will. I still think our market will come back, the tourists will come back, the economy’s going to turn around, and if they can hold on for a few years, they’ll do fine.”

Meanwhile someone is between a Rock and a Hard Place - out about $400 million… the cost of opening the park.

MORE BUYERS are coming to Myrtle Beach looking for a deal… and they’re finding them. I see it in my business… and other agents in town confirm it.

Realtor.com is also showing an increase in web traffic for Myrtle Beach… with a 24.6% increase in search activity, year over year. Myrtle Beach now ranks 42nd in the list of 135 national markets with the biggest growth in web traffic. Realtor.com is the national home search website of the National Association of Realtors.

Home and condo prices continue to decline… driven by bank foreclosures and short sales. Other motivated sellers want to cut their losses and move on. Expect more market weakness this fall as monthly carrying costs begin to take their toll on owners.

MLS data shows that Grand Strand home prices are down 7% and Grand Strand condo prices are down 20%, year over year. It’s been a tough year for sellers… but a great year for buyers.

We’ve got some units here that are back to their original selling prices, said Coastal Carolina Association of Realtor’s market analyst Tom Maeser. In some cases with new homes, they’re selling below what they were selling for when they were first built.

There are still “hurdles to overcome” said Maeser including tight credit markets, and the uncertainty surrounding the presidential election.

Investment opportunities abound in Myrtle Beach for buyers with cash or great credit… who are willing to take a long term (3-5 year) perspective. Some of my clients have picked up amazing bargains.

For more information on “Best Buys” and to order my Special Report on “How to Maximize Your Investment in a Buyer’s Market”… go to my website BarbaraChartier.com , or call me toll-free at 1-888-494-8654.

Data Resource: Jessica Foster, The Sun News, Myrtle Beach