The General Accountability Office has reportedly frozen more than 110,000 first-time home buyer tax credit refunds pending civil or criminal examinations due to allegations of fraud. The main concerns are whether or not a home purchase actually took place and if the home buyer claiming the credit is technically a first-time home buyer as defined by the IRS.

In another article about the possible first-time home buyer tax credit fraud, reporter Dawn Kopecki reports that children as young as four years old have improperly received the first-time home buyer tax credit. And, according to the Treasury’s J. Russel George, who testified before Congress recently: “They [IRS] also found that 580 taxpayers under 18 years old and therefore ineligible to buy a home claimed almost $4 million in tax credits.”

The first-time home buyer tax credit ends Nov. 30, 2009. If you do not have a property under contract by the end of October 2009 it will almost be impossible to complete the sale unless you are paying cash!

WASHINGTON (AP) – Sept. 10, 2009 – The recession is ending and the U.S. economy is finally growing again.

That’s the message implicit in the Federal Reserve’s latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions.

Economists warn the expansion is fragile and will have staying power only if consumers start spending more money. Rising unemployment that keeps Americans cautious could make for a plodding recovery in the months ahead.

The Labor Department will report on Thursday the number of new jobless claims filed last week, which could indicate whether the incipient recovery is slowing the pace of layoffs.

Wall Street economists expect that first-time claims for unemployment insurance benefits fell to a seasonally adjusted 560,000 from 570,000 the previous week, according to a survey by Thomson Reuters.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies’ willingness to hire new workers.

While the figures are volatile, first-time claims have trended downward in recent months. Initial claims topped 600,000 for most of this year, until falling below that level in early July.

The total number of people receiving benefits, meanwhile, is expected to drop by about 30,000 to 6.2 million. The figures on so-called continuing claims lag initial claims by a week.

All but one of the Fed’s 12 regions, meanwhile, indicated economic activity either was “stable,” showed “signs of stabilization” or had “firmed,” according to the Fed’s survey. The one exception was the St. Louis region, which reported the economic decline is “moderating.”

Businesses in most Fed regions said they were “cautiously positive” about the economic road ahead. The survey, known as the Beige Book, does not include precise figures.

Analysts predict the economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 percent to 4 percent. That’s mostly because businesses, which had slashed investments during the recession, are spending more.

Auto sales have been lifted by the government’s recently ended Cash for Clunkers program. Manufacturing and the battered housing market, which led the country into recession when it collapsed, have also shown signs of improvement.

The problem for the economy is that the expected growth this quarter comes mainly from the auto companies and other manufacturers, which are refilling their depleted stockpiles.

Those inventories had dwindled as factories and retailers sought to bring what they had more in line with reduced sales. Any robust growth in the economy might be short-lived if shoppers don’t step up their spending.

In the Fed survey, most regions of the country reported that the clunkers program had boosted sales. Other merchants struggled. And consumer spending remained soft in most places.

Still, the assessments of businesses on the front lines of the economy were brighter than those they provided for the last edition of the Fed survey in late July.

At that time, most regions of the country reflected only that the recession was easing its grip. “That’s a pretty significant change in tone from the previous Fed report,” said Brian Bethune, economist at IHS Global Insight.

The survey’s findings will figure into discussions when Fed Chairman Ben Bernanke and his colleagues meet Sept. 22-23. The Fed is expected to keep interest rates at record lows, probably for some time, to help nurture the recovery.

“There are presently some signs that the economy is stabilizing and even reviving in certain areas, despite mixed signals,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in a speech in Texas.

The market for homes is still weak — though it flashed some signs of improvement. In most places, buyer demand was stronger for cheaper homes, and in and around Philadelphia, sales were up for more expensive homes, too.

Fed regions credited a tax incentive for first-time homebuyers with increasing sales. Home prices kept falling in most parts of the country, though in the Dallas and New York regions, the survey found prices “firming.”

In a sign that lenders’ efforts to help troubled mortgage holders may be helping, the number of U.S. households threatened with losing their homes held steady last month, RealtyTrac Inc. reported Thursday.

The number of foreclosure-related filings — including default notices, scheduled auctions and bank repossessions — remains 18 percent higher than a year ago.

There was plenty of bad news in the survey. In the commercial real estate market, demand stayed weak, and construction fell in all parts of the country. And the job market was still sickly all over the nation.

The nation’s unemployment rate, which stood at 9.7 percent in August, could top 10 percent this year. Fisher, of the Dallas Fed, called for “uncomfortably high unemployment” as businesses keep cutting costs.

WASHINGTON – Aug. 19, 2009 – At least the market for new homes isn’t getting worse anymore, and that’s the first step to getting better.

In fact, the overall economy is actually getting a small boost as more buyers walk into model houses ready to sign contracts and builders hire workers to pour foundations and pave roads.

Construction of single-family homes rose in July for the fifth straight month, edging up almost 2 percent to the highest level since last October, the government said Tuesday. Building permits climbed nearly 6 percent.

Each new home built creates about three jobs on average and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

With new construction up 37 percent from its low point this winter, the industry is expected to help the overall economy this quarter for the first time in three and a half years.

“Housing is no longer a drag,” said Mark Vitner, a senior economist with Wells Fargo. “That’s a good thing.”

Of course, the housing industry is coming back from the worst recession since the Great Depression, and construction is still more than 70 percent from its 2006 peak. So the impact from hiring and spending on materials like wood and concrete is modest.

In addition, hammers are silent at construction sites for apartment buildings. For developers, it makes little sense to build when there are so many vacant homes and condominiums for rent. Apartment construction fell 13 percent from June to July.

That pulled the combined construction rate for homes and apartments down 1 percent to a seasonally adjusted annual rate of 581,000 units, from 587,000 in June. Economists polled by Thomson Reuters expected 600,000.

There are still several threats to the recovery of the U.S. housing market.

The unemployment rate, now 9.4 percent, could surpass 10 percent, leaving more homeowners unable to pay their mortgages. Interest rates are still near historic lows but could rise, making homes less affordable. Foreclosures are still at record highs.

And July was the last month that most builders could start new homes and have first-time buyers qualify for a new tax credit. Buyers can save 10 percent on the price of a home, up to $8,000 in taxes, if they complete the purchase by the end of November.

Builders and real estate agents are pressing in Congress for that credit to be extended. If it isn’t, sales could easily slump again.

“I’m not seeing a tremendous amount of good news on the job or economic front, so I do think it’s important that the credit get extended,” said Richard Dugas Jr., CEO of Pulte Homes Inc.

On Tuesday, Pulte completed its acquisition of Centex Corp. for $1.53 billion in stock, becoming the largest homebuilder in the country.

One of the reasons for the purchase was Centex’s focus on more affordable homes. Since the housing bubble burst, many builders have shifted to smaller houses that can be sold at lower prices to woo first-time homebuyers. The median sale price for a new home was $206,200 in June, almost $30,000 cheaper than a year earlier.

More homebuyers also means more business to retailers like Home Depot Inc., which on Tuesday posted its first annual increase in quarterly sales transactions in five years. Better still, the retailer saw improvements in Florida and California, two of its most important – and troubled – markets.

Sales of new homes have posted monthly increases since April. The Commerce Department reports on July new home sales numbers Aug. 26. Sales are expected to rise roughly 2 percent, according to economists surveyed by Thomson Reuters.

NEW YORK – Aug. 13, 2009 – The majority of economists surveyed by the Wall Street Journal say the recession is over and Federal Reserve Chair Ben Bernanke deserves another term.

Of the 47 economists the newspaper surveyed, 27 said the recession has ended and 11 predict another trough this month or next. The rest refused to commit. But they were nearly unanimous in saying that Bernanke should be rehired.

“He deserves a lot of credit for stabilizing the financial markets,” says Joseph Carson of AllianceBernstein. “Confidence in recovery would be damaged if he was not reappointed.”

Poll respondents believe Bernanke has more than a 70 percent chance of being asked by President Barack Obama to remain at the helm of the central bank.

Gross domestic product is expected to grow 2.4 percent in the third quarter at a seasonally adjusted annual rate. Economists were also heartened by a better-than-expected jobless report in July.

ATLANTA – Aug. 10, 2009 – Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.

“For every listing that comes out, we have 10 buyers,” says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif. Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.

“We had a lot of inventory last summer. Now we’re down to 1,500 listings – from more than 5,000,” Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.

Even in the hard-hit Detroit area, bargains are disappearing.

“For a good house that’s not too beat up in a good neighborhood, there’s no lack of buyers in this market,” says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. “There are a lot fewer of these properties than a year ago, and the super buys get multiple offers.”

Source: CNNMoney.com, Les Christie (08/06/2009)

ORLANDO, Fla. – April 23, 2009 – Florida’s existing home sales increased in March, making it the seventh month in a row that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). March’s statewide sales also increased over the previous month’s sales level in both the existing home and existing condo markets.

Existing home sales rose 30 percent last month with a total of 13,085 homes sold statewide compared to 10,080 homes sold in March 2008, according to FAR. Statewide existing home sales in March were 32.7 percent higher than February’s statewide sales.

Florida Realtors also reported a 25 percent rise in statewide sales of existing condominiums in March, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 37.2 percent over the total units sold in February.

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March and 13 MSAs also showed gains in condo sales. It marks the ninth consecutive month that a majority of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $141,300; a year ago, it was $201,700 for a 30 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report there is a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in February 2009 was $164,600, down 15 percent from a year earlier, according to NAR. In California, the statewide median resales price was $247,590 in February; in Massachusetts, it was $252,500; in Maryland, it was $253,200; and in New York, it was $210,000.

NAR’s latest housing industry outlook reported that entry-level buyers are seeking bargains, which resulted in sales of distressed properties accounting for 40 to 45 percent of February’s transactions. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said NAR Chief Economist Lawrence Yun.

In Florida’s year-to-year comparison for condos, 4,388 units sold statewide compared to 3,503 units in March 2008 for a 25 percent increase. The statewide existing condo median sales price last month was $108,700; in March 2008 it was $172,300 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $172,200 in February 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5 percent last month, down significantly from the average rate of 5.97 percent in March 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 539 homes sold in March compared to 445 homes a year ago for a 21 percent increase. The existing home median sales price was $123,700; a year ago, it was $159,000 for a 22 percent decrease. In the year-to-year comparison for the existing condo market, a total of 113 units sold in the MSA last month, up 24 percent compared to 91 condos sold the previous March. The market’s existing condo median price was $123,100; a year ago, it was $164,300 for a 25 percent decrease.

2009 © FLORIDA ASSOCIATION OF REALTORS

RISMEDIA, April 8, 2009-(MCT)-With Earth Day just around the corner (April 22), many of us are thinking of ways in which we can live a greener lifestyle. Now that spring has arrived, one of the best ways to go green at home is to use less water in both your yard and garden. 

April brings showers and showers revive grass, but soon thereafter, people start showering their lawns.

The average lawn rarely needs to be watered, said Bruce Augustin, chief agronomist for Scotts Miracle-Gro Co., a garden products company. Many homeowners think they have to water their lawns because everybody does it, Augustin said. Yet federal research shows only about 15% of homeowners actually do, and the other 85% still have lawns. Here’s why – even if you and your grass are completely hooked on the sprinkler – you can (and should) start weaning your lawn.

For example, the Chicago area gets about 36 inches of rain a year on average; its grasses need about 43, Augustin said.

Overwatering is bad for your grass. It encourages weak, stunted roots that can’t keep the grass alive when the weather gets dry. It fosters fungus diseases and provides a perfect home for root-munching grubs.

Too much watering also pushes grass to grow faster. Lay off the sprinkler and you can mow less often.

What happens to water that your grass doesn’t need and can’t soak up? It runs off into storm drains and, combined with sewage, increases the load on treatment plants. If you’re also overfertilizing, as many people do, the runoff can carry nitrogen and phosphorus that pollute rivers and lakes.

There are other environmental costs that come with watering your lawn too much. The water from your outdoor faucet had to be taken from either a lake or a well; filtered; treated with chemicals to make it safe enough to drink and pumped to your house, at a cost in energy as well as tax dollars. Using potable water for lawns is wasteful, and “your lawn doesn’t really need fluoride,” said Debra Shore, commissioner of the Metropolitan Water Reclamation District of Greater Chicago.

In a world in which fresh water is growing ever more scarce, those of us blessed with an abundance of it “have a moral obligation to show that we are using it wisely and carefully and respectfully,” Shore said.

Here are some tips to keep your lawn happy and be conscious of the environment at the same time: It’s the single most powerful thing you can do to get a lawn that uses less water, has fewer weeds and needs less fertilizer: Set your mower as high as it will go and leave it there.

Mow it high -

Short grass is weak and needy. Taller grass – 3 to 4 inches – grows deep roots that absorb water and nutrients efficiently, collects more life-giving sunlight and shades or crowds out many weeds. Taller grass doesn’t mean you will have to mow more often, but when you do, leave the clippings on the lawn to return moisture and nutrients to the grass.

Get a rain gauge - Knowing how much rain has fallen will reassure you that you don’t need to water. When tempted to water your lawn, get a trowel and dig out a plug of lawn. If the soil is moist within the plants’ root zone, 3 or 4 inches down, leave the sprinkler in the garage.

Get sturdy grass - Fescues are tough and thrifty with water. Usually fescue seed is mixed with bluegrass, which is less drought-resistant but finer and spreads to knit the lawn together. Use a fescue-rich mix to seed or overseed. If your lawn is all bluegrass, overseed yearly with fescue.

Establish grass well - The only time to water your lawn every day is when you have scattered seed, in early spring or early fall, and are waiting for it to sprout. A brief sprinkle will do, just enough to keep the seed moist. Spread mulch to hold the water around the seed.

Embrace summer dormancy - Grass naturally quits growing and dries out in the hottest part of summer, then revives and greens up when fall rains come. Go with the flow rather than watering to force the grass to stay all-green, and you’ll save water and escape mowing under the hot August sun.

Water long and deep - When you do water your lawn, run the sprinkler long enough to lay down the equivalent of 1 inch of rain. (Use a rain gauge to check). Don’t water again until your trowel test tells you the grass needs it.

Fertilize, but not too much - A good lawn does not require the heavily advertised five-times-a-year fertilizing schedule. An application of slow-release fertilizer once in spring and once in early fall is enough.

Work on the soil - Top-dress the soil with screened compost at least once a year to foster the rich ecosystem of underground organisms that delivers nutrients to roots and makes soil great.

Economists at the National Association of Home Builders semi-annual forecast conference predict home prices will hit bottom in the middle of 2009. As evidence, builders point to increasingly affordable prices, new home incentives, fewer housing starts, declining interest rates and pent-up demand. “I’m hopeful that the markets will come to their senses soon,” said Michael Moran, chief economist for Daiwa Securities America.

Let’s take a look at some of the opportunities and positive indicators for the future of Florida’s real estate market.

1. Long-term economic and demographic trends continue to favor Florida. By 2010 it has been forecast that Florida will be the third most populated state in the country. Florida’s population is expected to increase about 75 percent by 2030. Florida demonstrates a long history of strong growth. It has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often it has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic growth such as new jobs and growing incomes.  All of which is good for real estate.
2. People continue to move here. It’s estimated that 900 people move here every day. Based on recent trends, Stan Smith, director of UF Bureau of Economic and Business Research, said he expects Florida to add about 300,000 residents a year during the next two to three years unless there is a recession.
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WASHINGTON – Aug. 1, 2008 – Tell first-time homebuyers it’s time to commit: A provision of the recently-passed federal housing recovery bill gives first-time buyers an interest-free loan of up to $7,500 in the form of an income tax credit.

The credit equals 10 percent of a home’s cost up to $7,500, and applies to any single-family residence (including condos and co-ops) to be used as a buyer’s principal residence.

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