Denver Lofts and Condos

We have been getting a lot of questions about the details of the new tax credit that was just passed.  Thus, we have tried to break it out below so that it is easy to understand.  This new bill will help to continue the positive market trend we are experiencing here in Denver.  Here are the details:

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction

It's important to remember that the tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to  $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

Let us know if you have any questions after reviewing this information.  We would be happy to help!  You can speak with us directly at 303.522.7746 or 303.521.6262, or shoot us a note at agents@mynewera.com

The House today and the Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they've lived in their home for five of the past eight years. Home prices are capped at $800,000.

The legislation in both houses was included in a bill to extend unemployment benefits and is expected to be signed by President Obama shortly.

"REALTORS® appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners," says NAR President Charles McMillan. "As the leading advocate of housing and real estate issues, we urge President Obama to sign this legislation into law quickly to keep the momentum going in the fragile recovery of the nation's housing market."

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.

Compare the current tax credit with the newly passed version on REALTOR.org.

New homebuyers were treated to some wonderful news today when the Senate approved an extension of the New Homebuyer $8000 credit for contracts signed by April 30^th and closed by June 30^th.  It was an overwhelming 98 to 0 vote for the action as it heads to the House of Representatives.

Thats not all.  Thus far the Homebuyer Credit only applied to first time homebuyers.  The new legislation created a $6,500 tax credit for those have already owned a home for the one of the past five years.  Now it applies to homebuyers who have owned a home in one of the past five years. 

If you are reading this post and are considering purchasing a Denver loft or condo this might provide some valuable assistance. 

Its an incredible time to purchase your new home.  New Era Realty has seen some incredible price opportunities throughout our market.  Interest rates are at some of the lowest we have seen.  If things couldnt be more attractive, this new Senate legislation creates a $6,500 additional reason that todays market couldnt be more attractive for buyers.

If you are interested in learning more about this new incentive and how you might qualify for either the first time buyer incentive or the new existing home buyer credit please give us a call today at 303.522.7746 or 303.521.6262.  We are here to help you understand how these new changes will help you.

Link to CNN Story

The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30.

The Senate's bill also created a $6,500 credit for those who buy a home after owning one for the last five years. That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years.

According to CNN Money, Denver is one of the top 25 fastest growing cities, and has grown substantially in population and employment over the past two decades. The population of the nine-county Denver region is expected to increase from 2.64 million in 2005 to 3.88 million in 2030, an increase of approximately 47 percent. Employment is expected to increase from 1.56 million in 2005 to approximately 2.36 million in 2030, an increase of over 51 percent (http://www.denverunionstation.org/pdfs/deis/Chapter1_Purpose.pdf). The DUS development and the Fas Tracks program are being developed to help with the connectivity of the expanding population in Denver, and with the expansion of transportation, comes the inevitability of increased housing needs, and growth in business in areas surrounding transit hubs (since development and transit enjoy a symbiotic relationship) (http://denver.bizjournals.com/denver/stories/2009/03/02/editorial3.html). 

While Denver's growth may seem unreal considering the current economic situation where the credit crisis has halted many housing developments, subdivisions and stand-alone condominium buildings, the projects moving forward are the projects linked to broader revitalization or transit-related efforts (http://www.nytimes.com/2009/06/14/realestate/14sqft.html?pagewanted=1&_r=1).  According to the Urban Land Institute (ULI: a nonprofit education and research institute with focus on the use of land in order to enhance the total environment  www.uli.org) urban-style development seems to hold the most optimistic future in a generally depressing economy.  The survey found that urban redevelopment had the best future in housing, and urban mixed-use properties and town centers scored high among niche property types.  So if you are looking to purchase real estate in Colorado, it's clear what to look for when shopping:

• 1. The house, condo or loft should be in a well developed area, or in the process of becoming a well developed area (be sure the infrastructure is already in place!)
• 2. The house, condo or loft should be near public transit
• 3. There should be places to gather (restaurants, bars, shops, etc.). If there are places to gather that means there is a good foundation for a community
• 4. There should be parks, walking paths, and/or bicycle paths nearby

It's easier to understand the Walkability Score after studying the larger implications of what it entails and its clear that Denver is on it's way to being a super walkable city, as well as a great commuter city.

Oct. 29 (Bloomberg) -- The Obama administration endorsed plans to extend an $8,000 tax credit for first-time homebuyers, saying it is helping stabilize the nation's housing market.

The tax break, enacted earlier this year as part of the $787 billion economic stimulus package, has "brought new families into the housing market and contributed to three consecutive months of rising home prices," Treasury Secretary Timothy Geithner said today in a statement. The tax break will expire Nov. 30 unless Congress intervenes.

Senate Democrats have announced plans to extend the credit until April 30, while expanding it to include higher-income Americans and some who already own homes.

Senate Finance Committee Chairman Max Baucus said today the new plan would offer a $6,500 credit for homebuyers who have lived in their prior residence for at least five years. Couples earning up to $225,000 and individuals up to $125,000 would qualify for the break, Baucus said. That's up from the current $75,000 limit for individuals and $150,000 for couples.

"The success of the American economy is closely tied to the success of the housing market; by helping to stabilize the housing market, the homebuyer tax credit has helped to shore up the economy as it begins to recover," said Baucus, a Montana Democrat. "This would enable an even greater number of potential homebuyers to take the credit."

Millions of renters earn more than $75,000, he said.

By Robert Schroeder, MarketWatch
10/28/2009

WASHINGTON (MarketWatch) -- Senators have struck a deal to extend a popular tax credit for home buyers beyond those buying their first house, Senate Majority Leader Harry Reid's office said Wednesday.

Legislators also have agreed to extend the tax credit through the end of April, according to a Reuters report.

An $8,000 credit for first-time home buyers is set to expire at the end of November. Under a compromise reached by senators, the credit would be expanded to those who have lived in their home for five consecutive years, a Reid spokeswoman said.

The credit for repeat buyers would be $6,500.

The credit reportedly would be available for individuals making up to $125,000 a year and couples earning up to $225,000 per year, up from the current income limits of $75,000 and $150,000, respectively.

Reid wants to attach the tax-credit measure to a bill that would extend unemployment benefits.

 If you were to travel back in time ten to fifteen years ago and stand at what is now LoDo, Larimer Square, or the Central Platte Valley in downtown Denver, you would be shocked by the stark differences to today's atmosphere. Downtown was very under developed and there were few people living in these areas, not to mention very few things to do for visitors and tourists except to walk around the Sixteenth Street Mall which consisted of a few t-shirt stores, gift stores selling post cards and dream catchers, a Sharper Image, and a Dress Barn. How quickly things can change! Denver has been studied for its successful revitalization of downtown and has been used as a model for other cities attempting similar efforts. You may wonder why there has been such a success, and the answer lies primarily in the building of housing developments that create livable neighborhoods, with parks, paths, retail stores, restaurants, bars, and other such places for people to gather.  It's the notion of "place making", which downtown did not succeed in establishing until more recently. "Creating a place" is no simple task and requires the involvement of many different groups and organizations including local governments, private developers, residents, and business owners. Bringing local government and developers together may seem mutually exclusive, but they can both benefit: city participation may help developers raise funds in a tight market, while the investment can raise tax revenue for the city and attract employers and young professionals. By having government assistance in establishing infrastructure (roads, bridges, street signs, lights) to or in newly developed areas, it allows the developer to create a place without having to spend a high dollar amount in building the necessary infrastructure. 

Thanks to the collaboration of Denver's local government and developers, downtown Denver has grown tremendously over the past 15 years, and it is only expected to grow more, become easier to get to, easier to leave without having to drive (not to mention pay high amounts for parking), as well as have more retail stores, restaurants, bars, and other such places where people can gather.  Over the next 10 years 50 transit oriented developments are expected to be built around Fas Tracks ("FasTracks Program is a multi-billion dollar comprehensive transit expansion plan to build 122 miles of new commuter rail and light rail, 18 miles of bus rapid transit, 21,000 new parking spaces at light rail and bus stations, and enhance bus service for easy, convenient bus/rail connections across the eight-county district." http://www.rtd-fastracks.com/main_26).  The $7.9 billion expansion of our transit system is funded by a 0.4 percent sales tax increase approved by voters in 2004.  This investment is critical to downtown because Denver Union Station (DUS) is at the epicenter of the multimodal transportation. Enhancing DUS will bring many different means of transportation into one place and provide logical, safe and convenient travel and transfers.  This in turn will create a denser downtown with more things to do, see, enjoy, which will elevate the worth of the property in the location.

Denver is expanding at a rapid rate and for those of us that own our homes, or looking to buy, Denver is a place where demand will grow with the population, and so will the worth properties (especially in places like downtown where there is a limited amount of area to expand toward (except for vertically!). 

There is more good news to come regarding real estate in Denver, and in the second installment of this blog, we'll elaborate more on the future of downtown in parallel with the expanded development of DUS.