Kristi Nelson's Blog

Will they extend the Home Buyer Tax Credit?

Kristi Nelson — Thu, 15 Oct 2009 15:01:00 GMT

There has been much talk about extending the First Time Home Buyer Tax Credit, which is set to expire December 1, 2009. I personally have been involved in a transaction where the buyers where utilizing this tool and it was definitely the motivation (or at least one of the motivators) for this buyer to purchase a home. To qualify as a "first time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. This tax credit is equal to 10% of the purchase price (up to $8000) as long as your income is less than $75,000 for single buyers and married couples up to $150,000. If you make more than that, the credit decreases. If you want more details, please email me at kristi@buckleyrealestate.com or call me at 206-842-4099.

My hope is that this will be extended because it is a good way to get renters into buyers and get the housing market moving. There seems to be a lot of activity right now in the below $500,000 market on Bainbridge Island and it is my feeling that a lot of buyers are utilizing this tool. I also hope that not only will they extend it, they will further open it up to buyers who currently own homes. The question then becomes, how will this be paid for? Any thoughts on this?

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September is my Favorite Month on Bainbridge

Kristi Nelson — Sun, 27 Sep 2009 13:36:00 GMT

Well I think Summer is officially over, but I am not sure any one has told the Bainbridge Island Weather. With highs near 80 last week, the weather couldn't have been more "un fall" like. But regardless of the uncharacteristic heat, September has always been my favorite month on Bainbridge Island. Back to routines, back to the sounds of school buses, school zones, and Saturday morning soccer. This year not only am I Realtor Kristi, I am Coach Kristi for my 5 year old' daughters Bainbridge Island Parks and Rec Soccer Team. (shhh, don't tell anyone I've never played soccer competitively- only in PE classes!) What I love about Bainbridge is the community spirit we have. Even in the rain last Saturday morning, the soccer fields at Battle Point were packed with kids and parents. I am proud to report that both the LadyBugs and the Shooting Stars won their games.
...(Continued)...

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Increase your Equity Position by Selling

Kristi Nelson — Mon, 09 Mar 2009 13:10:00 GMT

Many sellers are holding off selling due to current market conditions and lower selling prices. What many sellers dont understand, however, is that if they are going to sell and buy a more expensive home (buy up), then NOW, in the current market, is the best time to do just that - buy up.

If sellers wait until the market goes back up, and their home's value increases, then the homes they are looking at to buy will also have gone up in price.

So... let me explain. Lets say the seller's current home was valued a while back at $700,000. Let's assume, for example, that market values have decreased 10%; their home is currently worth $700,000 minus the 10% drop in value ($70,000), which is $630,000. In addition, the price range they want to buy in is, let's say, $900,000 (remember, they want to buy "up". )Assuming the more expensive homes dropped 10% in value, too (often even more of a drop in higher-end homes), then that would mean the $900,000 homes dropped $100,000 to about $800,000.

The seller sells their home for $70,000 less than they "could " have sold it for before the market dropped. However, they buy the more expensive home for $100,000 LESS than they could have bought it before the market dropped. So, they "lost" $70,000 and then bought another home and "saved" $100,000. The math tells us that THE SELLER JUST MADE $30,000 IN EQUITY! This difference gets more dramatic the higher you buy up.

The bottom line: selling in a down market and buying a more expensive home, assuming both properties have depreciated at roughly the same rate, is a SMART thing to do. A seller can actually come out ahead by doing this. Waiting for the market to head "back up" can actually cost the seller more money than buying up in a down market.

If you would like to discuss your options, please give me a call and we can discuss it.

Kristi Nelson

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Welcome to My First Attempt at a Blog

Kristi Nelson — Tue, 18 Sep 2007 16:18:00 GMT

Welcome! Check out this blog from time to time and find interesting and newsworthy real estate tidbits of Bainbridge Island, as well as some happenings of the Nelson Family.

I do have good news to report! The Federal Reserve has dropped the Fed Funds rate today. I have pasted in an email regarding this issue from Matt Culp, of Bainbridge Lending Group. See below!

Hi there:

Well, the Fed cut the Federal Funds Rate by a point, lowering the rate to 4.75% from 5.25%. This is the first move in over a year and the first cut in over 4 years. This was a bit of a surprise as a majority had expected only a point cut. This will translate into a reduction in the Prime Rate to 7.75% from 8.25%. So, anyone with a line of credit on their home will see a point drop in the rate on their line.

The Fed comments indicate they are very aware of the housing and credit problems in the country and that these are and will continue to burden the economy. The cut was an attempt to forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

The stock market is rallying but the Bond yield is actually up. This means the Fed cut today is not likely, at least in the near term, to result in lower mortgage rates. Mortgage rates (and Bond yields) had drifted down over the last month or so as the economic data began to suggest the Fed would have to cut. Its all about timing. As I write this, the stock market is up about 250 points but the Bond yield is actually up at about 4.50, up from 4.46 yesterday. More to come on this as the markets digest the Fed comments.

Now the question going forward is what will the data tell us about inflation, jobs, and the housing/banking turmoil. More Fed cuts could come if the data suggest more of a slowing of the economy than the Fed is comfortable with. Hope this helps.

Matt Culp, J.D.

Mortgage Broker/Owner
Bainbridge Lending Group, LLC
510-LO-27342

206-842-7176 Direct
206-842-1444 Main
206-842-3358 Fax
206-755-6636 Cell
877-755-6636 Toll Free

360 Knechtel Way, Suite 404
Bainbridge Island, WA 98110

BLGloans.com

With that being said, I will add that there has seemed to be a recent increase in activity in the residential real estate market here. Most noticeably in the higher end. There have been 2 recent homes near $2 million that have gone pending in the last month. Also, another agent in my office who recently listed both a $2.6 million dollar home and a $3.5 million dollar home, has said that he has had a number of showings. So, there are buyers out there, they are just being selective. The $1- $1.5 million dollar market is still sluggish, however. Mostly because there are so many for sale. Market time in that price range is taking generally over 100 days at a minimum - in reality, we probably have 6 months worth of inventory there.

Now might be the time to buy that investment home you have been thinking about. There are some good deals out there now - Bremerton, Silverdale, and Poulsbo are all great spots for rental income. Give me a call if you are interested in broadening your retirement plan to include real estate!

Thanks so much for reading! Come again!

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