Yay! Free Money! Federal and California Tax Credits for Home Purchases

The good news is that there are both Federal and California Tax Credits available for certain qualifying buyers of homes that meet the requirements.  Note that the Federal and California tax credits are very different from each other, and the methods for claiming the credit are likewise very different.

This summary is provided for general information only and does not apply to any individual situation.  All buyers who are interested in qualifying for either or both of these credits are advised to consult with their own tax advisors.

1.  FEDERAL TAX CREDIT (FIRST-TIME BUYERS ONLY)

Amount:  $8,000 if home purchased in 2009, but no more than 10% of the purchase price of the home (half that amount if married filing separately).  $7,500 if purchased before 2009.

Expires:  December 1, 2009

Only First-Time Homebuyers Can Claim the Credit:  In general, buyers can claim the credit if they are a first-time homebuyer. Buyers are considered a first-time homebuyer if:

• They purchased their main home after April 8, 2008, and before December 1, 2009.
• The buyer (and spouse, if married) did not own any other main home during the 3-year period ending on the date of purchase.

Main home. A main home is the one the buyer lives in most of the time. Not limited to new construction.  It can be a house, houseboat, house-trailer, cooperative apartment, condominium, or other type of residence.

The Credit Cannot Be Claimed If:

• The buyer’s modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly).
• The buyer is a nonresident alien.
• The home is located outside the United States.
• The buyer acquired their home by gift or inheritance.
• The buyer acquired their home from a related person.

No Repayment of Credit:  There is no repayment of this credit if the home is purchased in 2009.  However, the buyer must repay the credit if the home ceases to be their main home within the 36-month period beginning on the purchase date.  (Note:  For homes purchased before 2009, the tax credit is subject to repayment rules.)

2.  CALIFORNIA TAX CREDIT (NEW CONSTRUCTION PURCHASES ONLY)

Amount:  Up to $10,000.  California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less.

Note:  Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.  Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately.

Expires:    March 1, 2010.

All Qualified Buyers Can Claim This Credit, Not Just First-Time Home Buyers:  This tax credit is available for qualified buyerswho on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

Qualified Buyer:  A taxpayer who purchases a Qualified Principal Residence that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner’s exemption (under California Revenue and Taxation Code Section 218).

Qualified Principal Residence – New Construction:  Any of the following can qualify if it is new construction (that is, it has never been occupied), is the buyer’s principal residence, and is subject to property tax, whether real or personal property:  a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.

First-Come, First-Served (or You Snooze, You Lose):  California has allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from the Franchise Tax Board (“FTB”). Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available.

How to apply:   Within one week (seven calendar days) after the close of escrow:

·         The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.

·         The buyer will complete Parts II & III of Form 3528-A.

·         The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer.

Fax is the only delivery method that will be accepted by, and considered for credit allocation by, FTB, as the date and time stamp on the fax will determine the order in which credits are allocated.

“Time is of the essence” on this one!  

1.  Remember, when the allocated amount of funds ($100,000,000) has been approved for credit by the FTB, there are no more tax credits available.

2.  Also, Buyers only have one week after close of escrow to apply for the credit.

For more information on the California tax credit (and a running total of the amount of credit left to be allocated) go to:  http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml#def2 or call the Franchise Tax Board at:  888.792.4900 (press 5)

San Francisco State of The Market

Advanced Listing Services was kind enough to provide me with this “State of the Market” report for San Francisco County. It analyzes new listings, the rate at which they are marked “pending,” and the number of properties that return to “active” after being “pending.”

The most intersting piece of information in the report to me, is that the listing price for pending properties is significantly lower than that of for sale or active properties. This suggests that only inventory at the lower end of the price range is really moving despite the fact that foreclosures continue to be a relatively low proportion of our inventory in San Francisco.

To see the report, click here.

Upcoming Listings

Well, we have some nice new inventory – especially in Cole Valley!  And look at all those price reductions.  Three in one week…wow is it a good time to buy.  If anything here looks like you or someone you know, please let me know so I can get you in ahead of the market!

$1,495,000/ Cole Valley/ BR/BA: 2/2.5 PKG: 2 Brief Description: Brand New Town home with high end finishes. 3 levels, private balcony, landscaped-patio and view of Mt. Tam and GG Bridge

$1,495,000/ Cole Valley/ BR/BA: 2/2.5 PKG: 2 Brief Description: Brand New Town home with high end finishes. 3 levels, private balcony, landscaped-patio and view of Mt. Tam and GG Bridge

$1,395,000/ Cole Valley /BR/BA: 2/2 PKG: 1+ Brief Description: Brand New Townhome w/ 3 levels-high end finishes-prvt balcony landscaped-patio and views, views, views

$1,395,000/ Cole Valley/ BR/BA: 2/2 PKG: 2 Brief Description: Brand New Town home with high end finishes. 3 levels, private balcony, landscaped-patio and view views, views

$1,099,000/ Pacific Heights/ BR/BA: 3/2 PKG: 1 Brief Description: Gorgeous, remodeled TIC unit, ~1,600 sq. ft., separate TIC financing available!

$1,095,750/Noe Valley/ BR/BA: 3/1.5 PKG: 2 Brief Description: Classic Mid-century home in a great location. Large flat yard and great expansion potential on the lower level, First Open on 3/8/9 1-4pm

$885,000/Sunset/BR/BA:3/1.5 PKG: 2 Brief Description: Gorgeous Parkway Terrace Colonial home….3 bedrooms on upper level…1.5 baths…elegant original details with sunny deck and yard price is negiotiable

$495,000 / Silver Terrace / BR/BA: 2/2 PKG: 1 Brief Description: SFD on great tree-lined block, views, charm, move-in ready condition with family room and parking pad.

$439,000/Twin Peaks/ BR/BA: 1/1 PKG: 1 Brief Description: condo w/parking & extra storage!

$315,000/ Opera Plaza/ BR/BA: 1/1 PKG: 1 Brief Description: JR- 1BD condo w/updated wood floor balcony; great pied-a-terre or first home purchase. Parking is avail for fee

$250,000/Petrero Hill/ Brief Description: 36 Commercial Loft Condominiums over 41 parking spaces. Investment property to lease now and possibly sell as individual lofts down the road. Kitchens and 2nd baths are stemmed in and individual owners can increase value exponentially somewhere down the road. High ceilings, huge windows, brand new construction, price is per unit – averaging 1200 Sq. Ft. each..

Pocket Listings:

$1,950,000/ Noe Valley/ 24th St BR/BA: 0/0 PKG: 0 Brief Description: This is 4/units commercial building on 24th Street

$900,000à/ South of Market / BR/BA: 1/2 PKG: 1 car/leased Brief Description: Stunning Brick & Timber loft conversion. 20 ft. ceilings, exposed wood beams, courtyard outlook, granite countertops, glass mosaic tile, cherry cabinetry w/built in pantry. Den area converts to a guest bedroom, with folding panel door.

Price Reductions:

$949,000/ Old Price: $1,049,000/ Hayes Valley/ 560 Haight #201 BR/BA: 2/2 PKG: 2 Brief Description: NY Style open loft, end unit with three walls of windows, top floor with huge deck off living space AND roof deck

$699,000/Old Price: $719,000/South Beach /1 Federal St #10 BR/BA: 1/1 PKG: 1 Brief Description: Fabulous New York Style loft – 967 sq. ft. with full-time concierge, a workout facility, community room, and storage rental. It is in close proximity to transportation, freeways, Waterfront Trail, restaurants, shops, the nearby Embarcadero, Muni light rail, Ferry building and the ballpark.

$620,000/ Old Price: $649,000/ Central Richmond/ 362 24th Ave #2. BR/BA: 2/1 PKG: 1 Brief Description: Over 900 sq. ft. for this spotless condo; great location; WalkScore – 92.

Walkscore to CrimeMaps – a Useful List

Here are some useful, interesting and/or fun websites for San Francisco and the Bay Area. I hope you enjoy them!  I especially love Walkscore, which is the first one!

• Everything Within Walking Distance of Your Home
• Chronicle List of Top 100 Bay Area Restaurants
• Chronicle Map of Top 100 Bay Area Restaurants
• Chronicle Top 20 Wines Under $40
• San Francisco Biking Resources
• Bay Area Hiking Trails
• San Francisco Parks & Recreation
• The Museums of San Francisco
• Civic Information & News by Neighborhood
• Guide to 25 Distinctive SF Neighborhoods
• Remodeling Cost vs. Value Analysis for SF
• Bay Area Public Transport
• Bay Area Trip Planner & Traffic Conditions
• San Francisco Recycling Resources
• Chronicle Foreclosure Database by Zip Code
• Disaster Preparedness Information & Resources
• San Francisco Crime Maps

2008 Homes of the Week – What Happened?

This year, I’ve really enjoyed writing the “Home of The Week” that usually heads this newsletter. I think the varied disposition of these different listings says a lot about the kind of year we had. I thought it might be fun to let you know how the marketing of each of these homes turned out. There is a link to the listing for each property (the address) as well as to the original blog post (the date).

 

Address	Date on Blog	Status
39 Havens	4/17/08	Remains unsold.  The price has been reduced three times from an original price of $1,675,000 and is now priced at $1,295,000
849 Sanchez	5/9/08	Originally priced at $3,250,000 it sold after 20 days on the market for $3,400,000 with multiple offers.
43-45 Sanchez	5/21/08	Originally listed for $1,525,000, this three unit building sold in 18 days for $1,600,000 with multiple offers.
Kick Ranch	5/30/08	Listed for $6.2 million, this award winning vineyard was withdrawn  from the market in July after about 3 months in the MLS.  Updates on the Web site look like the owners are enjoying having retained the property.
821-823 Fillmore	6/6/08	Originally listed for $1,898,000 in March, this property eventually sold in July after four price reductions for $1,500,000.
The Orchard at Carneros	6/18/08	The management has sold 28 out of 170 fractional shares in the 17 homes.  The 2008 price of $300,000 remains unchanged.
419 Peru	7/8/08	The property is currently available, but withdrawn from the MLS.  It was in escrow in October, but fell out because the buyer’s were unable to obtain financing.  Prior going into escrow the price was reduced once from the original list price of $649k to $619k.
1611-1613 Fulton	7/28/08	Sold after a mere 2 weeks on the market for $2,386,000, which was 10k less than the original asking price.  I believe the 10k was the result of a negotiation that occurred during escrow.
1601 Monterey	9/5/08	Listed for $5.4 Million, this home was sold after 29 days on the market for an undisclosed price.
2730 Fulton	9/26/08	One of the great success stories of 2008, the developers deserve to be congratulated for their timing as well as building exactly the kind of perfect family home we find in short supply in San Francisco in all price ranges.  This home was sold as a 4 bedroom, 2.5 bath fixer in March of 2008 for $1,605,000 and then brought back fully remodeled as a 5 bedroom, 4.5 bath showplace in September and quickly sold $17k over asking price for $2,415,000.
SF City Hall	10/30/08	Still not for sale.
123 Laurel	11/20/08	Perfectly reflective of the market mood, current scarcity of development capital, and the fact that the market prefers perfect homes, this yardless luxury fixer remains unsold at its original price of $3,750,000
60 Clarendon	12/12/08	After 80 days on the market, and a 300k price reduction just over a month ago, this home remains unsold.  This is reflective of the home’s design, which is beautiful and luxurious, but is not terribly well-suited to the kind of large family that could use all those bedrooms.

 

An Unusual Sighting

Last Friday, as I was parking on Union Street near Battery to visit Paragon’s Levi Plaza office, I saw this real giant ball of yarn with what I hope were fake feet sticking out of it. I did go pull on them to check. No yarn shops nearby, so I have no explanation. If you do, or want to make one up, please post.

Paragon Outperforms Market

In November 2008, Paragon was the #2 brokerage in SF by dollar volume of sales-with the highest average sales price of any brokerage in the top 10-after less than 5 years in business.

Upcoming Listings

$959,000/West Portal/ 2555 15th Avenue BR/BA: 3/2 PKG: 4 Brief Description: Beautifully remodeled 20s SFH. Ocean Views from upper level bedroom, large family room down new kitchen & baths, lovely garden, deck, hardwood floors and fireplace.

$779,000/ Bernal Heights/ 632 Prentiss / BR/BA: 3/2 PKG: 1.5 Brief Description: 2 story, clean and vacant single family home in great shape. This home should be on the market by 1/18 or 1/25 staged.

Pocket Listings:
$1,999,000/Pacific Heights /2067 Green St BR/BA: 3/3 PKG: 2 Brief Description: Top floor unit in two unit condo building. 2 levels. Master with Bay and Alcatraz views from sitting area. Not on MLS until early February

$1,349,000/ Marina/ 3530 Webster BR/BA: 2/2 PKG: 2-car Brief Description: Withdrawn from MLS but still available for sale. Fabulous full-floor condo in a 2-unit building in a prime Marina location. Beautifully remodeled kitchen and bathrooms. LR w/ wood-burning fireplace, formal dining room, great floor plan for entertaining. Move-in condition. Over 1500SF per the condo map.

$975,000/Nob Hill/1515 Leavenworth St. Brief Description: 7 studios + 2 non-conforming. Free standing, nice light and much upside. $60k+ inc. Must sell to complete exchange.

$867,000 or less /Telegraph Hill/ 1451 Montgomery # 7 BR/BA: 1+/ 1 PKG: 1 Brief Description: Completely renovated with dramatic panoramic views Telegraph Hill condo. 9 unit condo assn. with elevator from garage to the unit. A special place – one of a kind property. This view condo was listed with lots of activity before the holidays but no takers. Still available as sellers have identified a replacement property in Berkeley If you have a client looking in this area, let us know. We can set up a showing with notice.

$595,000/ Media Gulch/Mission / 2711 18th St #34 BR/BA: 1/1 PKG: Brief Description: Rarely available loft/condo in the former Sees Candy Factory Building. Huge east facing industrial windows, views, tons of exposed concrete, polished concrete floors. Dramatic space great for someone who is an artist or photographer or just a first time buyer who wants a very cool and affordable place. Could make a great second home too Wide open space, very cool. Great Inner Mission location by KQED.

Price Reduction:
$1,150,000 Old Price: $1,250,000 /Cole Valley / 1315 Cole Street BR/BA: 3+/1 PKG: 1 Brief Comments: NOT ON MLS, Private showings only, large Edwardian flat

House of the Week – Above It All on Clarendon

If you have ever driven up Clarendon from Laguna Honda, you are familiar with the thrill of the City suddenly spreading out before you as if you are on the very top of the world.  If you lived at 60 Clarendon, this surreality would be a constant.  With 180 degree City and Water views from all five levels, this home is worth a peek.  It will be open this Sunday from 2 to 4 and is priced at a mere $799,000 per view story (or $3,995,000 total).  Don’t be vexed by all the stairs – it has an elevator.

Solar Made Easy

I got a call a few weeks ago from a long-time client asking me if I’d ever thought about going solar. I said I thought it would cost too much for me and was worried about the hassles. Well, he introduced me to Jesse Brennan of SolarCity and all my assumptions turned about to be wrong. With zero downpayment and an initial net savings of about $5/month my family will be going about 50% solar in early 2009 using a lease program that’s easy to understand and sign up for. You may say, $5 a month isn’t much, but the real point isn’t the savings, it’s doing something better for the environment PAINLESSLY. I recommend that each and every one of you give Jesse a quick call or email and see what SolarCity could put together for your home. Jesse can be reached at jbrennan@solarcity.com or at (650) 963-5140.