North Dallas/Richardson/Plano Real Estate

This report covers the area north of Northwest Hwy. and south of LBJ.

Well this month's report is a perfect example of how statistics can sometimes be misleading!

The report shows sales jumped 100%. Sounds great, but there were only a total of 28 Sales. Not exactly setting the market on fire. The average Sales price continued to decline and the number of active listings also declined. The months of inventory is now down to 13.4 months. This is still very high but not as bad as it has been.

Now for the good news! There were several million dollar plus sales this month!

Sales: 28

Average Sales Price: $789,026

Median Sales Price: $432,000

Days on Market: 107

Pending Sales: 31

New Listings: 117

Active Listings: 521

Months of Inventory: 13.4

Extended and Expanded Tax Credit Expires 4/30/10

For prospective homebuyers who are on the fence about making a home purchase, the next few months represent a countdown of sorts as huge tax credits are about to expire. Here are important details for you to know:

Tax Credit for First-Time Homebuyers (FTHBs)
FTHBs (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.

Tax Credit for Current Homeowners
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. Those in the military do have some special extensions on the timelines available.

What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or 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 who qualified for the entire benefit 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 or no 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 sales price of $800,000.

It's also important to note another upcoming deadline as the Federal Reserve winds down a program that has been keeping home loan rates artificially low. The fact is that the lowest rates of 2009 were driven down to their attractive levels because of the Fed's Mortgage Backed Securities (MBS) purchase program, which the Fed once again emphasized in its January 27, 2010 Rate and Policy Statement will end on March 31, 2010. As the Fed's program winds down and ends, rates could rise over time since MBS will have less support from the Fed.

Extended and Expanded Tax Credit Expires 4/30/10

For prospective homebuyers who are on the fence about making a home purchase, the next few months represent a countdown of sorts as huge tax credits are about to expire. Here are important details for you to know:

Tax Credit for First-Time Homebuyers (FTHBs)
FTHBs (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.

Tax Credit for Current Homeowners
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. Those in the military do have some special extensions on the timelines available.

What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or 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 who qualified for the entire benefit 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 or no 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 sales price of $800,000.

It's also important to note another upcoming deadline as the Federal Reserve winds down a program that has been keeping home loan rates artificially low. The fact is that the lowest rates of 2009 were driven down to their attractive levels because of the Fed's Mortgage Backed Securities (MBS) purchase program, which the Fed once again emphasized in its January 27, 2010 Rate and Policy Statement will end on March 31, 2010. As the Fed's program winds down and ends, rates could rise over time since MBS will have less support from the Fed.

This report covers North Dallas North of LBJ.

Sales were off by 24% in December. the average sales price was up by 15% but this was due to the sale of 4 million dollar plus homes. The median sales price showed a decline of 10%. Pending sales were up 3% and we continue to see a decline in the number of active listing leaving us with a not bad 5.1 months of inventory. We will just have to wait and see if this decline continues on into January.

Sales: 54

Average Sales Price: $462,505

Median Sales Price: $269,000 

Pending Sales: 40

New Listings: 82

Active listings: 362

Days on Market: 81

Months of Inventory: 5.1

North of Northwest Hwy and South of LBJ.

Percentage wise sales were up 54% in December but this number was coming off an extremely terrible December of 2008. The actual number of sales was 43. The average Sales price declined by 39% and the median sales price was down by 37%. These numbers  do not represent an overall decline in sales price but reflect the fact the homes in the upper price ranges continue to not sell. The number of new listings continues to decline along with the number of active listings but we still have a 12.8 months supply on the market.

Sales: 43

Average Sales Price: $651,416

Median Sales Price: $499,900

Pending Sales: 17

New Listings: 43

Active Listings: 486

Months of inventory: 12.8

North of LBJ

NORTH OF NORTHWEST HWY. AND SOUTH OF LBJ:

There was a pick up in sales in this area in September but the average sales price continued to erode. Pending sales picked up along with the number of new listings. The number of active listing was flat. There continues to be an over supply on the market with a 17 month supply of homes for sale. Million dollar homes make up over 1/3 of the inventory in this area and they are very slow to sell.

Sales: 48 a 17% increase

Average sales price: $889,828 a 9% decrease

Median sales price: $650,000 a 2% increase

Days on market: 135 a 41% increase

Pending sales: 39 a 39% increase

New listings: 118 a 15% increase

Active listings: 612 a 0% increase

Months of inventory: 17

NORTH DALLAS NORTH OF LBJ:

Sales were down slightly in September and we saw a decline in the average sales price while the median sales price was flat. Days on market increased. Pending sales were off along with the number of active listings. The decline in inventory of homes for sale in this area is helping to keep supply/demand somewhat in balance.

Sales: 69 a 4% decrease

Average sales price: $294,761 an 8% decrease

Median sales price: 269,750 a 0% increase

Days on market: 66 a 22% increase

Pending sales: 63 a 10% decrease

New listings: 117 a 2% increase

Active listings: 444 a 12% decrease

Months of inventory: 6.1 

For purposes of this report north Dallas is broken into two section:. North of Northwest Hwy and south of LBJ and North of LBJ.

North of Northwest Hwy and South of LBJ:

Sales in this area in August continued to be weak. The upper price ranges are not moving. Sales were of by12% compared to a year ago. The average sales price continued to decline along with the median sales price. Pending sales showed a strong increase being up by 33%. The number of active listings was flat and we say a decrease in the months of inventory which continues to remain very high at 17.2 month.

Sales: 43

Average Sales Price: $914,178

Median Sales Price: $639,900

Pending Sales: 40

Active Listings: 614

Months of Inventory: 17.2

North of LBJ:

Sales were off again in this area of North Dallas, but we did see an increase in the average sales price of 13% and a smaller increase in the median sales price of 2%. There was a 6% decrease in the number of pending sales. The number of active listings declined by 12% helping to keep supply/demand closer to a balance. The months of inventory in this area is only 6.5 months.

Sales: 73

Average Sales Price: $349,303

Median Sales Price: $272,000

Pending Sales: 59

Active Listings: 478

Months of Inventory:6.5

In order to qualify for the first time homes buyers tax credit of $8,000 your new home must close no later than November 30th. If everything goes right you should have your new home under contract by the end of October to make the deadline. However, we know that things do not always go as planed. After you do inspections, you might find problems with the house that can not be worked out with the seller or maybe you decide that there are to many issues and terminate the contract. There might be appraisal problems or maybe the lender just keeps asking you for more information. There are many thinks that can delay a closing.

I would strongly recommend that if you are trying to use this tax credit, that you have your house under contract by the middle of October just to be on the safe side.

THIS ONLY LEAVES YOU ABOUT 5 WEEKS TO FIND THAT HOUSE!

For purposes of this report North Dallas in broken down into two sections.

North Dallas north of Northwest Hwy. and south of LBJ

This area of Dallas contiunes to experience difficutlies. The high end market is very slow. At the end of July there was an 18.7 month supply of homes on the market. This is a very high number.

Sales were off by 31% in July and the average price declined by 16% while the median price declined by 29%. This is just another indicator of the problems effecting the upper end market.

Pending sales declined by 31% which will not help August closed sales.

Sales: 50

Average Sales Price: $842,270

Median Sales Price: $530,000

Pending Sales: 29

New Listings: 110

Active Listings: 683

Months of Inventory: 18.7

North Dallas North of LBJ

Sales in this area of North Dallas were up by 27% and we saw a 1% increase in both the average and median sales prices. Pending sales also showed a sharp increase of 21%. The number of active listings contracted by 13% leaving us with an inventory of 6.5 month.

Sales: 117

Average Slaes Price: $326,127

Median Sales Price: $275,000

Pending Sales: 80

Active Listings: 490

Months of Inventory: 6.5

Many of you have probably never heard of the Home Valuation Code of Conduct (HVCC) but if you are buying or selling a home you may encounter appraisal problems due to this change in appraisal standards.

On Thursday The National Association of Realtors chief Economist Lawrence Yun released the following statement:

"In the past month, we have suddenly been bombarded with many stories of, at the last moment, transactions falling apart because appraisals are coming in unrealistically low. As a result it opens up a new round of negotiations between a buyer and a seller or in many cases the buyer just steps away."

The HVCC went into effect at the beginning of May as a result of a lawsuit by New York State Attorney General Andrew Cuomo against Washington Mutual, Fannie Mae and Freddie Mac agreeing not to buy any loans that did not comply with the code. Since Fannie and Freddie are the largest purchasers of loans, the rest of the lending industry had no choice that to go along.

The HVCC creates a firewall between lenders/brokers and appraisers. This is supposed to keep lenders and brokers from putting pressure on appraisers to meet a certain value. Lenders are no longer able to pick up the phone and call an appraiser that they know does quality work. The appraisal work must be assigned on a rotating basis by someone who is not the loan officer.

Most lenders have turned to appraisal management companies. Appraisers sign up with these companies and give them a list of zip codes the appraiser will accept assignments in. When the appraisal management company gets an order from a lender, they send out a blast e-mail to all the appraisers that have signed up for the zip code of the property. The first appraiser that accepts the assignment gets the job.

There are several problems with this approach. The appraisal fees are now being shared between the appraiser and the appraisal management company. The appraiser is getting about half the fee he uses to get. This means that the appraiser has to do twice as much work to earn the same money and in order to get the jobs, he is forced by the system to sign up for more and more zip codes for the chance of a job.

The National Association of Realtors is reporting that Realtors are telling them horror stories of appraisers not knowing the local market, doing appraisals that use computer models that often incorporate sales that are not comparable, of not knowing that the home had extensive renovations or additions and even reports of appraisers not having access to the local MLS. I have no idea of how these appraisers are getting their sales information.

In order to compete and get jobs in this new environment, appraisers have to cut corners and this does not help either the buyer or the seller. The really good appraiser is not opting into this system.

The HVCC was designed to take fraud out of the appraisal process but it is looking like we have thrown the baby out with the bath water.