Code to Require Fire Sprinkler Systems

Beginning in 2011, fire sprinklers will be required in all single and double family homes and townhomes under a rule approved recently by the International Code Council. Supporters of the code cite fire safety issues, and say that the sprinklers will help people have more time to escape a fire. Others worry about the cost of these systems and how that will effect the total cost of new housing and maintenence costs.

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1 in 6 Homeowners Upside Down

Realtor magazine is reporting that about 16% of homeowners (or 1 out of every 6) owe more on their mortgage than they would be able to sell the home for. The situation is even worse for people who bought their homes within the past 5 years and haven’t had a chance to build up equity. Last year, only about 6% of homeowners were upside down in their mortgages, and the year before, it was only about 4%.

Really, I wouldn’t worry too much about this if you have no plans for moving in the near future. The market will stabilize and prices will begin to rise again and as time goes by, you will be paying your mortgage down which will help build equity. The problem comes when people who are upside down (or close) need to move. Sometimes, you think you have no plans to move and then something in your life suddenly changes. When that happens, I often see people who have to find a way to bring money to the closing table to sell their home.

Are you curious?? If you would like to know what the market is doing in your Indy-area neighborhood, I can do a quick (read: not as accurate as it could be, but still useful) Comparative Market Analysis for your property and just e-mail you the results. All I need to know is your address, number of bedrooms & bathrooms, amenities, and things like that. I can give you a ballpark figure with no cost or obligation. Just send me an e-mail (mmorris@callcarpenter.com) with the info and I can help you figure out if you are upside down in your mortgage.

Hendricks County Property Tax Bills Coming Soon…. Finally!

Update, 10/16  Hendricks County has put the new tax numbers on their web site, and it is GREAT NEWS! Most people will see a significant decrease in their tax amount. Many people have already paid the spring installation when we were sent a “catch-up” billing in the summer, and some of you can even expect a refund from your mortgage company!! I can look up your taxes for you (yes, your tax info is available to the general public) or you can visit the Hendricks County Tax look up site by clicking the link below.

Original Post Follows:

We Realtors® have always had a difficult time trying to explain Indiana’s property taxes and the fact that they are paid in arrears. In Hendricks County, as in many Indiana counties, we now have the special problem of trying to figure out how much our clients will have to pay or receive due to the confusion of our late tax bills. Usually property taxes are due in May and November, but we are still waiting on our May tax bills to come!

The wait for Hendricks County residents may soon be over. County Treasurer Nancy Marsh hopes to have everyone’s tax bills delivered by October 10th. They will be due November 10. Yes, these are the bills that were supposed to be sent out in May. “Voluntary” statements were sent out this summer to give people a chance to pay most of their bill, so that the payments would not be so close together. For most of us, our taxes are collected and put into an escrow account by our mortgage companies. However, people who do not have mortgages are going to be feeling the pinch, and need to be sure their tax bills get paid.

What about the November bill? Clearly it would cause a lot of trouble to have to pay it all at once for some, so rather than sending out the November bill on time, they will wait until January to send them out and they will be due around February 10th. Yes, we will be paying taxes for 2007 in the beginning of 2009. Then, we will see if the next bill is on track in May.

Marsh says that she thinks most people’s bills will be going down this year. Indiana now uses trending to assess our values, and with the market moving downward, we are lucky that we are being re-assessed, even though it is a pain. Many peoples’ home values have dropped, and so their assessed values need to go down as well.

If you would like to check your taxes, you can look up your home on the Hendricks County Property Tax lookup site. This will show you what your tax bill will be and what you have paid in the past. You can also check to be sure that you have your property tax exemptions filed. Most people should have their Homestead and Mortgage Exemptions filed, and some will have more for things like disabilities, veteran status, old age, and some energy-saving improvements.

Call Me or leave a comment below if you have any questions about your property Taxes!

Do you Qualify for a $7,500 tax credit?

The Housing and Economic Recovery Act of 2008 provides a $7,500 tax credit for qualified first-time home buyers who purchased homes between April 9, 2008 and July 1, 2009. Do you qualify for the tax credit? Call me to find out for sure!

First-time home buyer– any buyer who has not owned a principal residence within the past 3 years prior to the purchase. For married couples, neither person can have owned a home in the past 3 years. Ownership of a vacation home or a rental property not used as a principal residence does not disqualify you from being a “first-time buyer”.

How do I claim the credit? When you file your federal income taxe return, you will claim the credit. No other forms or applications are necessary.

Income dependant– The credit received depends on your income. Partial credits may be available for people who earn more than the Adjusted Gross Income limits. Credit will be phased out until it reaches the limit where it becomes completely unavailable ($95,000 for single filers, $170,000 for joint returns).

Home purchased is under $75,000– Generally, the credit is equal to 10% of the qualified home’s purchase price, capped at $7,500. Most people will get the whole $7,500 credit, unless they exceed the income limits OR purchase a home under $75,000, in which case they will get 10% of the purchase price.

Credit is refundable– even if you do not have a tax liability, or your liability is less than $7,500 they will send you a check for the credit (a refund).

Repayment– This tax credit DOES need to be repaid to the government. Home buyers who receive the credit will need to repay the credit over 15 years (or when the home is sold, if there is sufficient capital gain) with NO interest. The credit will be repaid at $500 per year, starting 2 years after it is claimed. Basically, this is a zero interest LOAN from the government.

Some people are wondering if they should take this credit at all. That is a question for your tax accountant or financial planner. I think that if you do not need it for any specific reason, then you might not want to take it. However, if you have credit cards or other debts with interest, it might make sense to use this money to pay off those higher-interest debts.

Hip-Hop fan? Buy a Hip-Hop House!

OK, that title is a little silly, but it’s true, you can be the new owner of a famous rapper’s home. Actually, there are 5 that were reported…

Suge Knight. After he filed for bankruptcy and lost control of his record company, Death Row Records founder Suge Knight’s $6.2 million mansion went up for sale last year.

Kanye West. The Grammy-winning rapper’s six-bedroom, 35,000-square-foot Beverly Hills, Calif., mansion went up for sale six months ago for $8.7 million.

Russell Simmons. The Saddle River, N.J., manse of producer Russell Simmons is for sale for $20 million.

50 Cent. Rapper 50 Cent’s Farmington, Conn., 19-bedroom, 50,000-square foot mansion went on the market last year for $18.5 million.

Scott Storch. The hip-hop producer’s $10 million mansion is located on Miami Beach’s exclusive, manmade Palm Island. Storch, recently hitless and two years delinquent on property taxes, is facing foreclosure.

Now, I’m not big into rap, but even I know who most of these guys are. I think it would be pretty cool to own one of their homes. Hey, maybe you’ve even seen these homes on “Cribs”, MTV’s show where they feature the homes of famous artists. You can actually say you have a home on “Cribs”! Holla!

Source: Forbes, Peter Hoy (08/18/2008 )

Yesterday’s Compliance deadline spelled trouble for some mortgage brokers

New changes in Indiana law now require mortgage brokerages to have a principal manager who has passed a competency exam, and some area brokerages have missed the compliance dealine set for this requirement. This took effect in July 2007 so lenders have had plenty of time to get this done, and it was last month that they were told they had until yesterday to comply or lose their license. The law also requires loan officers to pass background checks and register with the state.

360 Indiana mortgage companies have failed to meet the compliance deadline and will face the consequences. It will be a long process, so be sure to check before you talk with any mortgage company to be sure they are licensed and have complied with competency laws.

Read the IndyStar.com article here

Check the Secretary of State’s site to see which companies have missed the deadline.

Builders buying up land while prices are low

I’m just going to go ahead and copy/paste this article, because it’s a good one. I find it very interesting that builders are buying up land now that it is cheaper. They are preparing for the upswing, just like I am by taking classes and learning all I can during this “slow” time. When the train starts rolling, I am ready!

Daily Real Estate News  |  July 11, 2008Builders Bank on Turnaround, Buy Up Land

Builders, including Lennar Corp, KB Home, Hovnanian Enterprises Inc, Meritage Homes Corp., are back buying and developing land again.

Lennar spent $162 million on new land in the second quarter and will spend at least $200 million more by the end of the fourth quarter, JP Morgan analyst Michael Rehaut wrote in a note to clients. KB expects to spend $300 million on land and $400 million on land development this year, Rehaut said.

Hovnanian is working on a land development joint venture, company spokesman Jeffrey O’Keefe says. And Meritage is “beginning to shift from defense to offense,” looking to buy land in the second half of the year, wrote Wachovia analyst Carl Reichardt after meeting with Meritage management.

In theory, buying land now is a smart move, said Todd Lowenstein of HighMark Value Momentum Fund, which owns 187,000 shares of Pulte Homes Inc.

“You have to be a predator in these down markets to position yourself for the upturn,” he said.

Source: Reuters News, Helen Chernikoff (07/10/08 )

Poll shows people believe market will improve with new president

According to a poll done by Harris Interactive for Move, Inc., 44% of home buyers think that the housing market will improve next year when the next president is in office.

“Survey Says”

The survey showed that 81% of home buyers are still nervous about the market and the obstacles that are keeping them from buying homes. The problems they face include lack of a down payment (28%), their income level (20%), lack of confidence in the ecomony (26%), and high home prices (31%).

Putting these fears aside can’t be easy, but many of the respondants do intend to buy a home in the future. Nearly half of current homeowners plan to purchase another home while 80% of renters plan to eventually buy. The poll also showed a slight shift in the way buyers are looking at properties they are considering. More and more buyers are willing to make sacrifices to save up a larger down payment, and are more willing to make compromises in neighborhood amenities. Buyers are taking current gas prices, growing environmental concern and the importance in community features into greater account.

“These findings show that despite the difficulties home buyers face in the wake of the subprime crisis and their concerns about economic uncertainty, underlying demand appears relatively strong. Consumers see better times coming,” said Lorna Borenstein, president of Move, Inc.

Personally, I am surprised by the statistic given for people who are concerned about the high price of homes. As we continue to see the prices drop throughout the country, homes are becoming more affordable to more people all the time. Please call me if you think you can’t afford to buy right now. I can help you sort through the rumors and give you the facts to help you determine is home ownership is right for you right now. I can also put you in touch with my trusted team of experts who can see if you can qualify for a mortgage.

You can find full survey results by clicking here!

Davis Homes to Cease Operations

This housing downturn has been rough on a lot of people, and now another Indianapolis builder is falling victim to the slump. Davis Homes, a family owned builder established in 1985, has about 10 communities still in various stages of being complete. Most of the communities are going to be finished out by other builders, hopefully in similar quality as they assure on their web site.

Over the past few years, housing starts have continued to drop. The Indy Star reports that from 2005 to 2007, annual housing starts have dropped 45%.  

One thing I can say for Davis Homes, is that if there is a “right way” to cease operations, they are doing it. From Davis Homes’ statement, “Unlike some companies that simply closed their doors, Davis has worked hard during the past few months to implement a plan to complete all the homes that were under construction and to pay homebuilding vendors and subcontractors. In addition, Davis invested in warranty insurance plans for all of its homes and homeowners to ensure that future warranty obligations will be met.” I feel like that is a very noble move on their part. They aren’t trying to burn bridges, they are not filing bankruptcy and they are not hanging their customers out to dry.

I remember when I first moved to Avon, people were starting to complain that the town was growing too quickly. There were too many new home subdivisions and too many homes on the market overall. They were even talking about not allowing any new home building for 6 months. Now, with housing starts way down, and a market where people aren’t moving unless they have to, we are starting to see the amount of inventory decreasing. As the inventory of homes available continues to decrease, the market will continue to “right size” itself, I believe. I don’t have my crystal ball with me today, but I feel optimistic about the number of homes available going down for once. Perhaps those old laws of supply and demand will have a chance to balance themselves better.

Read the Indy Star article here.

Read Davis Homes’ statement here.

Hawaii requires Solar Powered Water Heaters

Hawaii has become the first state to require solar powered water heaters. Beginning in the year 2010, all new homes are required take this step to reduce Hawaii’s dependance on imported fossil fuels. Right now the state relies completely on imported fossil fuels.

With the new law in force, no building permits will be issued for single-family homes unless they have a solar water heater. Exceptions will be allowed for areas without a lot of sunshine, like forested areas.

Of course, some fear that this will only drive up the already high costs of homes in Hawaii, but I think it is another good step towards energy independence. Who knows, I might feel differently if I were required to do it.