Pending home sales rise 6.7%

The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in nearly eight years, a sign that sales are finally coming to life after a long and painful slump.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
Economists were encouraged by the report, and stock indexes advanced modestly.
"This is yet another positive indication that the bottoming process is forming," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "Now if only prices would stabilize."
Economists surveyed by Thomson Reuters expected the index would edge up to 85 from a reading of 84.6 in March. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.
In early trading, the Dow Jones industrial average added about 20 points to 8,741, and at times traded above 8,776.39, its finish for 2008.
Still, some economists wonder whether rising mortgage rates will dampen home sales. Nationwide average rates for 30-year-fixed rate mortgages are around 5.3 percent this week compared with about 5 percent a week earlier, according to Bankrate.com.
And analysts cautioned prices will take longer to stabilize, because of the glut of unsold properties on the market.
"Even if sales volumes rebound, home prices will keep falling under the weight of the massive inventory overhang," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
The Realtors' index was 3.2 percent above last year's levels and has risen for three straight months after hitting a record low in January. A nearly 33 percent sales increase in the Northeast and a 9.8 percent jump in the Midwest led the overall surge. Sales contracts rose 1.8 percent in April from a month earlier in the West, but fell 0.2 percent in the South.
The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by President Barack Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.
Still, Yun cautioned that the pending sales data is more volatile than in the past because many sellers need banks to agree to take less than the original mortgage -- a so-called "short sale." That process is often difficult, time-consuming and can wind up falling apart before the deal closes.
The Federal Housing Administration last week released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don't have to wait to get the money from the Internal Revenue Service.
Completed home sales rose 2.9 percent to an annual rate of 4.68 million in April from a downwardly revised pace of 4.55 million in March, the Realtors' group said last week.
Sales of inexpensive foreclosures and other distressed low-end properties have even sparked bidding wars in places like Las Vegas, Phoenix and Miami. But the market for high-end properties remains at a virtual standstill.
The national median sales price in April plunged more than 15 percent to $170,200, from $201,300 in the same month last year. That was the second largest yearly price drop on record, according to the Realtors' group.

Homebuyer Snapshot

Did you know???

That the average age of the first time homebuyer is 30?

That the average purchase price of a first time homebuyer is $165,000?

That the average age for a repeat buyer is 47?

That the average purchase price for a repeat buyer is $236,000?

That 57% of the population has never lived outside of their current state?

That 37% of the population has never left their hometown?

That 20% of the population has left their hometown but never lived in a different state?

People define home differently: 26% say it's where they were born or raised; 22% say it's where they live now; 18% say it's where they have lived the longest; 15% say it's where their family comes from; and 4% say it's where they went to high school.

Did you know that Maggie will be 9 years old on June 17th???

Anyone Tweet?

Want to get instant updates on the real estate market? You can now follow my mom on Twitter.

You can find her under

TifaniAndCo

As a reminder.....

Don't forget to set your clocks ahead tonight. It's time to 'Spring Forward'! Yay, now it will be lighter out longer!

First-Time Homebuyer Tax Credit

My mom is getting asked tons of questions about this first-time home buyer tax credit. I decided to post a few of the top questions she gets asked.

Frequently Asked Questions
In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale.
For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009.

Who is eligible?
Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

Do I have to repay the 2009 tax credit?
NO. There is no repayment for 2009 tax credits.
Do 2008 purchasers still have to repay their tax credit?
YES. The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return.

How do I apply for the credit?
There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at http://www.wra.org/Communications/107064/12372229/63067228.
So I can't use the credit amount as part of my downpayment?
No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

In a world of bad news, here's a story to put a smile on your face.

Team's gesture supports grieving opponent
ESPN.com news services
Two missed free throws, ordinarily the cause of a coach's headache, became the symbol of sportsmanship in a Milwaukee boys' basketball game earlier this month.
Milwaukee Madison senior Johntell Franklin, who lost his mother, Carlitha, to cancer on Saturday, Feb. 7, decided he wanted to play in that night's game against DeKalb (Ill.) High School after previously indicating he would sit out.
He arrived at the gym in the second quarter, but Franklin's name was not in the scorebook because his coach, Aaron Womack Jr., didn't expect him to be there.
Rules dictated Womack would have to be assessed a technical, but he was prepared to put Franklin in the game anyway. DeKalb coach Dave Rohlman and his players knew of the situation, and told the referees they did not want the call.
The referees had no choice. But Rohlman did.
"I gathered my kids and said, 'Who wants to take these free throws?'" Rohlman said, recounting the game to the Milwaukee Journal Sentinel. "Darius McNeal put up his hand. I said, 'You realize you're going to miss, right?' He nodded his head."
McNeal, a senior point guard, went to the line. The Milwaukee Madison players stayed by their bench, waiting for the free throws. Instead of seeing the ball go through the net, they saw the ball on the court, rolling over the end line.
"I turned around and saw the ref pick up the ball and hand it back to the player," Womack said in the Journal Sentinel. "And then [McNeal] did the same thing again."
Said Rohlman: "Darius set up for a regular free throw, but he only shot it two or three feet in front of him. It bounced once or twice and just rolled past the basket."
"I did it for the guy who lost his mom," McNeal told the newspaper. "It was the right thing to do."
Womack, overwhelmed by DeKalb's gesture, wrote a letter to the DeKalb Daily Chronicle, which had first reported the story.
"As a principal, school, school district staff, and community you should all feel immense pride for the remarkable job that the coaching staff is doing in not only coaching these young men, but teaching them how to be leaders," Womack wrote.
DeKalb had traveled more than two hours for the game, and waited another two as Womack rushed from the hospital, where he had been with Franklin, to the school to gather his team.
"We were sympathetic to the circumstances and the events," Rohlman said in the Journal Sentinel. "We even told Coach Womack that it'd be OK to call off the game, but he said we had driven 2½ hours to get here and the kids wanted to play. So we said, 'Spend some time with your team and come out when you're ready.'"
The two schools had met twice previously, and this one ended with a Madison victory, but as in the other games, they also shared a pizza dinner, "four kids to a pizza, two Madison kids and two DeKalb kids," Womack told the Journal Sentinel.
"That letter became a big deal in DeKalb," Rohlman said in the paper. "We got lots of positive calls and e-mails because of it. Even though we lost the game, it was a true life lesson, and it's not one our kids are going to forget anytime soon."
Womack, in his letter to the DeKalb Daily Chronicle, added this at the end: "I'd like to recognize Darius who stepped up to miss the shot on purpose. He could have been selfish and cared only for his own stats [I hope Coach Rohlman doesn't make him run for missing the free throws]."

Winnebago Home Show

I wanted to let you know that the Winnebago Home Builders Association (WHBA) Home Show starts tomorrow and runs through Sunday. My mom will be working at the show in the Coldwell Banker The Real Estate Group booth on Saturday, February 14th, from 10 a.m. to noon. Please come out and visit her and other members of the Pawlosky Team as well!

Admission is free if you bring a canned good. All donations are going to the Salvation Army Food Pantry which my mom is a big supporter of. You can also make a donation to the Habitat for Humanity to get in free of charge. For more information you can check out http://www.whba.net/.

I wish I could go with my mom but she said they don't let 4 legged people in. How unfair!