Does Alaska Have A Housing Crisis? August 9, 2008

Alaska Real Estate Expert — Sat, 09 Aug 2008 07:00:00 -0800

Is the national housing crisis really a crisis? Dennis Kneale recently addressed the issue on CNBC.His message took on a positive spin regarding the real estate market. He demonstrated in the video that the housing crisis is really only a crisis at a micro level. Here in Alaska we are fortunate; our current foreclosure rate is less than 1%. We haven't been hit hard at all, but then we took our hits in the late 1980's.

Our future economic growth looks positive. Tourism, oil revenues, a new prison, growth in the military, low interest rates, more retail store growth and job growth for starters. While job growth slowed in 2007, it's still growing and I expect our employment growth rate to be between 2-3% this year. This should help our struggling real estate market recover more quickly. So while we haven't seen much sun this summer in Alaska, I think I am starting to see at least partly sunny skies in the future of our residential real estate market, and that's good news for everyone.

Check out our Best Buy List if you are looking for a home or an investment property. There's no sense driving around to look at property with gas prices over $4.41 per gallon. You can see every listing in Alaska on my web site. Interest rates are lower than ever----It's a great time to buy in 2008. Kristan

Legislature Approves Energy Relief, August 8, 2008

Alaska Real Estate Expert — Fri, 08 Aug 2008 07:09:00 -0800

According to KTUU last night at 9:00 p.m. The Alaska State Legislature approved an energy relief package, just hours before its midnight deadline.

The package gives all Alaskans eligible for a Permanent Fund Dividend in 2008 an extra $1,200 as an energy resource rebate. The legislation also suspends the 8 cents a gallon state fuel tax and adds funding to the state's Power Cost Equalization program.

The bill will now go before Gov. Sarah Palin for final authorization and I am sure will be signed since it was her idea to begin with! Kristan

The Housing and Economic Recovery Act of 2008 Questions and Answers

Alaska Real Estate Expert — Mon, 04 Aug 2008 08:31:00 -0800

The Housing and Economic Recovery Act of 2008 was just signed by President Bush with some amazing benefits for first time homebuyers. When is the last time someone gave you a $7,500 loan, that has no interest, no payments for two years, and if you do not make enough profit when you sell, you do not have to pay back the loan? That is what first time homebuyers get. Call everyone you know who wants to buy their first home; this is too good to miss.

If you have not owned a home in three years, you are a first time home buyer. If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for a credit. Call your friends who just bought a home and tell them they may take $7,500 off their tax bill if they qualify. It has to be your principal residence, so rentals do not count.

The tax credit is 10% of the cost of the home, up to a maximum of $7,500. So, if the home costs $65,000, your tax credit is $6,500. If the home cost $100,000, you would get a credit of $7,500. This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit. In other words, you take $7,500 off your tax bill. What if your tax bill is only $5,000? The IRS will send you the additional $2,500 as a refund. When was the last time the IRS sent you a refund because you bought something?

The loan has no interest, and will be paid back over 15 years. You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment. You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year. If you stay put for 15 years, you pay it off with no interest.

What happens if you sell the house? You pay the balance back at the closing. So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house.

What happens if you do not make enough money when you sell your house? They forgive the rest of the debt. In other words, get $7,500 now and pay back nothing if your house only breaks even, or loses money, at closing. When was the last time you got a loan on a speculative venture where the person who gave you the loan forgave the rest of the loan if you did not make enough profit on the sale?

The risk of loss in buying now is on the government. In other parts of the country where real estate is going down in value, you can lose 10% of the value of the home (up to $7,500) and the loss is covered by the fact that you do not pay back the tax credit. The Raleigh real estate that first time buyers can afford is going up in value, so we are not as worried about the risk of loss. Even a bad buy that does not go up in value is covered by the tax benefit because you get $7,500 no matter what happens.

Similarly, if you die before repaying the debt, it is forgiven. There are special rules for sales as a result of divorce or if the government takes your property by condemnation.

There are restrictions on the amount of income that you can make and still get the credit. But the restriction is $75,000 per year for a single person and $150,000 for a couple filing jointly, so the vast majority of people qualify. If you make more than that, you can still get some of the tax credit, but there are complicated rules about phasing out the credit as the income goes up. If you make that much money, you can afford to hire someone to figure out the formula.

The restriction on the location of the property is minimal; it has to be in the United States. Not too tough, huh?

What is the catch? You have to buy your first house in three years before July 1,2009, not have super high income, not use bond financing and buy anywhere in the US, Not too difficult, right?

If you know someone who wants to buy a home, call them and then have them call us and we will take exceptional care of them. If they want to buy anywhere in the US, call us and we will find them a terrific agent anywhere in the US.

The government gives tax credits to huge companies; here is one for the little guy. Don't miss it. (information posted with permission from my cyberstar Realtor friend Tim Burrell)