Bonnie Gilbert's Blog

Someone asked me if a first time buyer could get the federal tax credit if they had a parent co-sign for them on the mortgage. I dug around on the IRS website and found just this scenario in the Q&A section.
This scenario came for the IRS website: http://www.irs.gov/newsroom/article/0,,id=206294,00.html.

“S2. Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?

Yes. Taxpayer B is not a first-time home buyer and cannot claim any portion of the credit, but A may claim the entire credit ($7,500 for purchase in 2008; $8,000 for purchase in 2009), if the home was purchased as Taxpayer A's primary residence.”

Visit the IRS link I have provided for more answers to your tax credit questions.

Great news for buyers who have owned and lived in their primary residence for 5 of the last 8 years! If you were thinking about trading-up or scaling down, the federal government is offering a $6,500 tax credit for a limited time to qualified buyers who purchase another home. The National Association of Home Builders has provided a comprehensive website with questions and answers for buyers who may qualify for this new tax credit. It truly is a great time to be a home buyer! Visit the NAHB website for comprehensive information: http://www.federalhousingtaxcredit.com/faq2.php#1.

I love hiking in the Blue Ridge and Smokey Mountains. If you are planning a visit to Western North Carolina or are considering relocating, I would like to share some pictures of amazing places in around the area.

Shining Rock Wilderness area off the Blue Ridge Parkway.


Dupont Forest, Three Falls.



Lake Toxaway in the Fall


Mtn. Mitchell, on a cloudy day.

There has been a lot of talk in the News Media regarding inflation, and historically periods of recession and depression are commonly followed by periods of inflation.
What will the coming period of inflation mean for home buyers and sellers?

An inflationary period will definitely bring new challenges to the real estate market (Well, some not so new to those who bought homes in the early 1980's- when interest rates where between 10-15%).

For Buyers: Most people who buy a home have to borrow money for the purchase. Borrowers are subject to repay the principle plus interest to their lenders. The interest rates are determined by the lender and established during the purchase process. Today's interest rate for a 30 year fixed rate mortgage is 5.36%, according to BankRate.com. If a Buyer purchases a home with a mortgage amount of $200,000 at today's 30 year fixed rate, their payment would be $1118.07 a month for principle & interest. However, say that the inflationary period causes interest rates to increase- let's say to 7.36%- that same mortgage will cost the Buyer/Borrower $1379.30 a month, a monthly payment increase of 23% for the same house at the same purchase price. We have all gotten use to "cheap" money and low interest rates. Some people might be shocked at a 2% increase in interest rates, but when I bought my first home in 2000, just 9 years ago, my interest rate was 8.25% and that was with good credit.

For Sellers: Selling your home in an inflationary period will be a challenge. Even though prices have fallen in many ares, the overall cost of buying a house will increase for Buyers as they are hit with higher interest rates on loans. This will cause the pool of available Buyers to shrink due to the simple lender qualifying ratios for monthly payment costs. Seller financing and assumable loans were great options in the 1980's, but assumable loans have gone the way of the dinosaur and many sellers don't own there homes out right to offer seller financing. This inflationary period could lead to even lower sales prices to off set the reduced buying power of Buyers and lead to even large amounts of inventory in areas of high priced housing.

So, when I am asked by Buyers or Sellers if we have reached the bottom of the market and if now is a good time to buy or sell a home- my answer would be to act sooner than later. There is no crystal ball to predict when inflation will start setting-in, but past indicators predict that inflation is likely in the near future.

The 2009 $790 billion stimulus package still has advantages for first-time home buyers. The First-Time Buyer tax credit was increased from $7,500 to $8,000, and requires no repayment for buyers who hold on to their property for at least three years.

The credit remains open only to first-time buyers (those who haven't owned in at least three years) and some income eligibility restrictions apply.

The prior stimulus package passed in 2008 required that first-time buyers repay the tax credit over a number of years. The new plan is definitely more of an incentive for First-Time Buyers.

Source: Source: NAR, AP, Washington Post, New York Times, Bloomberg, Realtor Magazine, and Wall Street Journal.

The final numbers have been calculated for Buncombe County real estate sales for 2008 by the Board of Realtors. The statistics are based on residential properties listed in the North Carolina Mountains MLS.

The average three bedroom residential property sold for $256,911; down from the previous 2007 average of $269,259. The total number of residential properties that sold in 2008 was 2,454 units with averaging days on the market from list to sell of 201. Residential sales were down by 1,025 units from 2007 sales reports.