HOME START

The State of Illinois has finally caught up with many of our neighbors. The Home Start Loan Program is now available through Illinois Housing Development Authority. Home Start features two different programs. While this is good news, there are no Vermilion County lenders appearing on the site's data base of participating institutions.

For our purposes we will be focusing only on the Tax Credit Advance Loan, today. You must first qualify for the 30 Year Fix Rate Loan. You may borrow 3.5% of the loan amount not to exceed $6000. This is an interest free loan if it is repaid by June 30, 2010. Failure to do so will lead to the loan becoming a 10 fixed rate loan. You will be required to attend a homebuyer education program. And finally, if you close on or before 11/30/2009, you will earn the First Time Home Buyer tax credit. So don't forget to file form 5405 with your taxes. For complete details please besure to read the plan overview provided by IHDA.

On a related note HR 2801 currently in committee is a promising piece of legislation. Hear are the high lights:

1. Extend the eligibility for the tax credit to all who are purchasing their primary residence.
2. Extending the purchase date through 12/31/2010.
3. To take effect upon passage of the bill.

There are rumors the top rebate will go up from the $8000 offered in the current legislation. This is in Ways and Means at the moment. But I will keep tracking it and keep you posted.

Real Estate News and Trends

I just read an article about buying foreclosures "on the court house steps". WHOA there buddy. They are off the mark. Here is a good example of an article that has no basis in reality. When a property is sold "on the court house steps", the initial bid is the judgment amount. So if the person was upside down, under water or any of those other words bandied about, then the minimum bid will likely be more than the actual value of the home. The mortgage balance, unpaid interest assessed, and legal fees are all part of that amount.

Initial listing prices are typically near the judgment amount when the property does go onto the market. Because many of these homes have challenges, the prices fall to far below market values. Some people being removed from their homes vandalize them as they are moving out.

An analysis I did for our MLS showed that for all foreclosures sold in DABR MLS for 2008, the eventual selling price was 2/3 of the initial list price. Lest you think the Realtors(r) are setting the inflated prices to fatten their commissions, rest assured, we are not setting the prices on foreclosures.

The article does mention a couple of pitfalls you may encounter when buying on the court house steps. Properties are often kept under lock and key until the sale. You are usually buying them sight unseen. The second major draw back the article mentions is the sale price is due in a short period. In IL you must pay the total sale price within 24 hours.

WCIA news aired a good story tonight. Two interesting bits of information I was able to glean: Champaign County's average home prices are almost double those of Vermilion County. The second interesting stat: home prices in Champaign County have declined by 19% compared with last year. Contrast that to the nearly flat pricing in Vermilion County. The one thing both markets have in common is that about 23% fewer homes have sold this year.

Want to buy a new home, but don't have a decent down payment? The NAR (National Association of Realtors (r)) announced that there has been a modification to the $8,000 tax credit, for 1st time home buyers. Stay tuned for further details as they unfold. I spoke with a local mortgage broker who indicated they don't have details, yet. But, I will let you know as soon as we know how the new program will work.

April Trends

The preliminary numbers for April in the Danville area are promising. I will have a more complete report on Monday. The initial numbers show our year to date (YTD) sales verses last year are still slow. But we are improving. The scary average selling values in March look like one of those one time blips. Our YTD average selling price is essentially flat (-.45%) as compared with last year.

Number, Numbers, and More Numbers

If you missed last months stats you can follow along by looking in the archive or visiting http://activerain.com/blogs/rohall59.

Numbers, numbers, and more numbers; but, what do they all mean. Over the coming days and weeks, we will look @ Danville area real estate trends, and what they mean.

This post will focus primarily on the general trends for the 1st quarter of 2009. Stay tuned for Information on the impact of foreclosures on the local market, as well as, price range comparisons.

I am writing this to shed light on the local real estate market. We constantly hear the major media stories filled with gloom and doom. It’s my goal to help you sort through all the hype and to dispel some of the myths out there.

Danville has not seen some of the steep declines we hear so much about. Just as we didn’t see run-away price inflation, we have not seem the “bubble burst.” That’s not to say the foreclosure market hasn’t had an impact. It has. But pricing is really a problem too.

Here's how we compared with 1st quarter last year.

1. Average selling value declined by 4.4% or about $2800.
2. Average Days on Market went up by almost 1 month.
3. Average % of list price to selling price went down.
4. Average listing price went up. An average increase of over $8000
5. Total number of transactions declined by 25.6%.
   

So what does it all mean. As a group we are listing homes for more than they're worth. Have your agent prepare a market analysis. If is looks overly optimistic, ask questions. As a seller be realistic. Look at the numbers carefully. And above all, don't close your mind if some one shows you the facts in black and white.