Cyberhomes Blog

Latest tax credit is just more of same

Fri, 06 Nov 2009 05:00:00 GMT

President Barack Obama, as expected, signed a bill today that includes a home buyer tax credit that will give up to $8,000 to first-time buyers and up $6,500 to buyers who have owned their home for at least five years.

This bill will take over for the first-time buyers tax credit program that will expire after Nov. 30. The new program also expands the pool of eligible consumers with income limits raised to $225,000 for couples and $125,000 for individuals.

The one aspect of this program that everyone can agree on is that this is a positive for buyers. Hey, who’s going to turn down free money?

But after that, it’s up in the air if the tax credit significantly spurs home buying or just gets people to purchase a home sooner. NAR claims that the first-time home buyers credit contributed to at least 350,000 home sales. A more conservative estimate has come in at about half that.

The politicians certainly were behind this bill. More likely, the politicos were more afraid “not” to vote for it than any backlash they may get from their constituents.

In reality, this is another tactic in the psychological war on the recession. The tax credit is no different that the stimulus checks we all got last year under George W. Bush or the recent Cash for Clunkers program from the Obama Administration. Both are designed to push people to action — spend —by offering a short-term benefit — money with which to spend.

You can look at charts and graphs until your eyes glaze over trying to predict where the economy is going. But history says the best way to get through a recession is to spend your way out.

To spend, consumers and business have to be confident that they’re not the only one opening the checkbook. So, we wait around for somebody else to do it. When enough businesses start hiring or consumers begin spending, the more of those on the sideline jump in. Pretty soon, everyone’s feeling good.

It’s kind of like a couple years ago when houses were appreciating so fast that we talked ourselves into thinking it could go on forever. OK, maybe that’s a cheap shot, but the psychology is basically the same.

Now, putting money in the hands of people and business isn’t a bad thing. The Republicans did it by handing out cash, although they would much rather cut taxes. Of course, those are a lot harder to reverse than one-time payments.

Unfortunately, if you just give people money, there’s no guarantee what they’ll do with it. They may pay off debt, which doesn’t really spur the economy. Or, heaven help us, they put the money in the bank.

The Obama administration has preferred a different tactic – “I’ll give you something if you do what I want.”

So whether it’s Cars for Clunkers or Casa’s for Cash, the goal is the same — get people spending money. The clunkers deal worked pretty well while it was going. After the program was over, the dealers found they had gone through their pool of future buyers.

The real estate industry will see something similar. The fact is, only so many people have the means and the will to buy a home. So unless people start making more money or get a good vibe about their financial future, not a lot is going to change.

Nearly all of the buyers are first-timers and investors, and they are competing for the same entry-level properties. The move-up market is dead because few want to sell their home at the bottom, leaving the foreclosed and the desperate contributing inventory.

The one thing this tax credit has over Cash for Clunkers is that once you’ve bought a car, there’s not a whole lot else you need. It’s different with a house. It’s proven that those who buy a home will likely spend more money after the purchase. Hiring contractors, buying materials or purchasing appliances spreads money to more sectors of the economy than just buying a car.

Unfortunately for me, I drive hybrids so the clunker thing didn’t work. Living in Southern California, $6,500 won’t likely even cover my closing costs. No, I’m staying on the sidelines, paying down debt and waiting for the next stimulus program.

Personally, I’m voting for the Green for a Getaway program.

Now that’s something I could really use.

Buy my vacation home -- please!

Fri, 06 Nov 2009 07:00:00 GMT

There was a time when it seemed that everyone owned a vacation home -- or at least dreamed of owning one, anyway. Vacation homes were seen as cash cows that would reap easy money in quick appreciation, plus the added bonus that rental money would bring in.

Oh, how times have changed. These days, you could probably pick up a vacation home for a relative bargain, but not so many people are buying them these days -- at least compared to the heyday of the housing boom.

“Second homes have become an ugly stepchild in an environment [where] people aren’t even buying first homes,” the Wall Street Journal quotes Cicily Maton, a financial planner for Aequus Wealth Management Resources LLC in Chicago.

Vacation homes have become financial burdens to some homeowners, the Journal says, adding that according to data from the National Association of Realtors, the median price of a vacation home dropped 23 percent from 2007 to 2008, with sales falling about 31 percent from 2007.

If you are struggling to afford your vacation home and have been unable to sell, the Journal suggests renting out your second home and becoming a landlord and even donating your home to charity as possible remedies.

Meanwhile, the New York Times’ “Raising the Roof” blog says that according to a survey by vacation website HomeAway.com, 27 percent of second-home owners say they’ve entered the rental market because of an economic hardship like job loss or not having any luck with selling their property. (To read the survey, visit HomeAway.com.)

Not many people I know own vacation homes (owning a vacation home is a little too rich for my blood), but I do know of one former colleague who since being laid off from her journalism job, has been trying to sell the townhome in Naples, Fla., that she bought at the height of the housing boom. She too, has turned to renting out her second home to make up for some of the financial burden, and regularly posts and Tweets about the rental on Facebook and Twitter.

Readers: What do you think: Vacation home -- financial investment or burden?

Home buyer tax credit goes to Obama

Thu, 05 Nov 2009 03:00:00 GMT

The bill to extend the $8,000 tax credit to first-time home buyers and open the program to move-up buyers easily cleared the House of Representatives by a 403-12 vote Thursday. The House vote came a day after the Senate passed the measure 98-0.

President Barrack Obama is expected to sign the bill on Friday.

This new program will replace the one that was part of the 2009 American Recovery and Reinvestment Act. That program is set to expire after Nov. 30 and offered up to an $8,000 tax credit to only first-time buyers.

Here’s a look at the new tax credit program for homebuyers:

• To qualify, homebuyers have until April 30, 2010 to be under contract for a home purchase and until June 30, 2010 to close the transaction.

• Move-up buyers can qualify for 10 percent of the purchase price with a maximum $6,500 tax credit. Move-up buyers must have owned their home for at least five years. First-time buyers can still qualify for up to $8,000.

• The bill also expands the income levels to qualify. Homebuyers cannot have taxable income above $225,000 for couples and $125,000 for individuals. The previous limits were $150,000 for couples and $75,000 for individuals.

• Buyers will not qualify if they are purchasing a home for more than $800,000. Non-owner occupied homes are also not eligible. This includes purchasing homes to use as an investment and vacation properties.

• Military personnel serving outside the United States for at least 90 days will have an extra year to qualify.

The real estate industry was hoping for a plan that would extend the credit through 2010, but will have to settle for one that gets them through the cold winter months and the beginning of spring. It was also looking to have the credit available to all homeowners, which also did not happen.

Senator Johnny Isakson (R-Georgia) is a former real estate agent and was a major proponent of the bill. He stated that this is likely the last extension of the tax credit.

The $6,500 tax credit is an effort to get move-up buyers back into the real estate market. The National Association of Realtors said it believes the first-time buyers credit produced 350,000 sales, although other groups have said the number is closer to 200,000 when accounting for people who would have purchased a home anyway.

About 1.4 million buyers have taken advantage of the first-time buyers tax credit. The cost of the new tax credit will be nearly $11 billion in lost tax revenue.

Remodel and save

Thu, 05 Nov 2009 08:00:00 GMT

If you haven’t done any remodeling yet this year, now may be the time. The Wall Street Journal reports that thanks to the economic downturn and slow housing market, homeowners are paying as much as 20 percent less for home improvement projects, compared to what the same projects would have cost them a few years ago.

On average, remodeling prices are down 5 percent to 10 percent from their peak across the U.S., the Wall Street Journal says. This is because contractors now looking for jobs are willing accept less for their work and because the cost of some materials -- like plywood and insulation -- are down, the Journal says.

Tax credits increase savings

Couple the lower of cost of remodeling projects with federal tax credits that are now available for energy-saving projects like adding insulation or energy efficient windows to your home, and you can see substantial savings for home improvement projects that you take on. Also, because contractors are scrambling for work, it's also more likely that they'll actually return your call.

I’ve found that out a few months ago. I finally had luck with getting a contractor to fix a leaky window in my home. Up until this year, I couldn’t get a contractor to come to my home because everyone I called said the job was too small and not worth their time. Many told me that if I agreed to install several new windows in my home (instead of just fixing one) -- at a cost of hundreds, if not thousands of dollars -- my job would be big enough to consider. To that I said, "No thanks." I still have window companies calling me.

Recently, I had custom curtains installed in my living and family rooms. I called one contractor, and once I had her bid, I called a local interior design showroom that I preferred. To get the job, the owner matched the quote of the other contractor, even though the quality of the showroom’s fabrics was significantly better. I went with the second designer's quote, and am happy with the job.

Readers: What do you think -- is it a good time to remodel?

Barter for home fixes

Wed, 04 Nov 2009 12:00:00 GMT

My fellow blogger, Heather Boerner, recently wrote a story for Cyberhomes about how in today's slow economy, some people are bartering for home services.

I have recently found out -- quite by accident -- that bartering can work.

I have done very little to update my home since purchasing it seven years ago. However, I recently had custom curtains designed and installed by a local New Jersey interior design shop, Pat's Decor, of Cranbury, N.J. The owner and I got to talking, and before I knew it, she had commissioned me to create a Facebook page for her business. It seems that with the economy down, fewer homeowners have been enlisting her interior design services. She's hoping that the Facebook page (which will be regularly updated with news about the shop and its promotions, etc.) will help her reach out to new clients.

In exchange for getting her Facebook page started for her, the shop owner is visiting my home next week to help me pick out new window coverings for my kitchen. It works out for both of us, since she doesn't have to pay cash for my work, and I don't need to go to the expense of buying new curtains.

For more on how you may be able to barter to improve the look of your home, read Heather's story. The story includes helpful links to online barter exchanges, where you can trade your services.

Readers: Have you ever used the bartering system? Do you think it's a viable way to get home improvements done?

Whitney Houston's low note

Wed, 04 Nov 2009 06:00:00 GMT

Singer Whitney Houston may be on the comeback trail (click here to see the filming of her "Million Dollar Bill" video), but apparently, all isn't well in the pop star's world. The singer has put her 12,561-square-foot home in Mendham, N.J., on the market for $2.5 million -- significantly less than its assessed value of $5.6 million, according to published reports. Coldwell Banker Residential Brokerage has the listing.

The singer/actress, who starred in the movie, "The Bodyguard" with actor Kevin Costner, purchased the property for $2.7 million in 1987. It was at the home, which sits on 5 acres at 22 North Gate Road, that she wed her abusive ex-husband, singer Bobby Brown.

Whitney, 46, nearly lost the home in 2006, when a mortgage company filed a lawsuit against her for $1.04 million, and foreclosure papers were drawn, says NJ.com. Whitney was able to avert foreclosure, however.

The contemporary residence has round living spaces, floor-to-ceiling windows and skylights.

Perhaps Whitney has been neglecting the home -- she and her daughter, Bobbi, have been living in Los Angeles, and her home is now "dated looking," says NJ.com. (Or perhaps she's just having trouble finding furniture that will work in round rooms.)

Are interest rates ready to rise?

Tue, 03 Nov 2009 03:00:00 GMT

Sometimes news with the biggest potential impact finds little interest. So, it wouldn’t be surprising that most of America took little, if any, notice that the U.S. Government has wrapped up its seven-month orgy of bond buying that totaled $3 billion.

So what does that have to do with mortgage interest rates?

Well, the Federal Reserve has kept mortgage rates artificially low by manipulating the market. It did this by allowing banks to borrow money at from 0 to .25 percent interest rates to guarantee that money is available for consumers to borrow. This is called liquidity.

Liquidity is only one part of the equation. Banks may have money to lend, but they also need someone to sell the mortgages to. Lenders do not usually keep the mortgages they make; they sell them at a profit and reuse the money to make more loans. Because the marketplace had no interest in buying these mortgage-backed securities, the government instructed Fannie Mae and Freddie Mac to do so.

The government’s plan is to act as a bridge until the markets can return to normal. It is testing this theory by ending its massive purchase of bonds. How the bond market reacts may signal what the government will do about keeping mortgage interest rates at historic lows.

The current plan is to ease up on buying mortgage-backed securities and have the program end after March 2010. The hope is that the market for mortgage-backed securities will have returned to normal.

But nobody knows if it will. Even if it does, it’s likely the Fed will begin raising interest rates as long as it doesn’t adversely impact the economy. Mortgage rates could easily rise as the market demands a greater return than the government did when buying mortgage-backed securities because they believe the risk is too high.

Everyone wants the economy to keep improving, unemployment to drop and wages to rise. The downside of this is that it will cause mortgage rates to rise by increasing demand for money. One only has to go back to the early 1980s when inflation ran amok, led by rapidly rising wages, and mortgage rates were in the upper teens.

I doubt we have that to worry about in the near term, but with the Fed getting ready to remove the safety net that has been supporting the mortgage market, there’s a good chance we are nearing the end of the 5-percent mortgage rate era.

Last year mortgage rates topped out at 6.63 percent according to Freddie Mac. The payment on a $100,000 loan at that rate would be about $640. At 5 percent, it’s about $537. Of course, if you’re looking at a bigger mortgage, a $100 difference for each $100,000 of loan amount adds up pretty fast.

This doesn’t mean you have to run out and buy a house this weekend. But if you are planning to buy, you may want to make your move soon if the interest rate is a concern. Think how nice it will be 10 years from now when you have that 5 percent, 30-year loan and everyone else is paying the historic mark of 7.5 percent or more.

And keep your eyes on the news, especially how the treasury market reacts to the government’s purchasing pullback.

Tax credit may include move-up buyers

Tue, 03 Nov 2009 07:00:00 GMT

The Senate appears to have sifted through the myriad proposals to extend the First-Time Homebuyer Tax Credit and draft a program that will include those who have owned their home for at least five years.

The Senate agreement is similar to an earlier proposal that was gaining traction. The final version calls to extend the $8,000 tax credit for first-time homebuyers for contracts signed from Dec. 1 through April 30, 2010. Buyers will have until July 1 to close.

The proposal allows for current homeowners to receive a tax credit, although it will be for a maximum of $6,500 and they have to have lived in their current residence for at least five years. Expanding the credit to current homeowners is likely an attempt to spur activity in the move-up market.

Although the entry-level market has seen significant activity, which the real estate industry attributes to the tax credit, the move-up markets have been lazy at best. The reason is that the vast majority of entry-level homes being purchased are bank foreclosures or bank-approved short sales and homes owned by people looking to get out of owning a home. Not many are selling to buy a more expensive property.

Many economists and the real estate industry are at odds over the impact of the tax credit. The National Association of Realtors claims the credit has resulted in 400,000 sales. More conservative estimates outside the industry put the number at about 200,000 because they say most of the people who bought a house would have done so without the credit.

The Senate proposal has bi-partisan support, although the House of Representatives has not weighed in. The current First-Time Homebuyers Tax Credit is set to expire Nov. 30, but supporters would like it passed and signed by President Barrack Obama as soon as possible.

Until it becomes a reality, some buyers may stay on the sideline because it would be difficult to purchase a home now and be able to close by Nov. 30 in case the program does not materialize.

Also unknown is how the proposal will be voted on. Senate Democrats want to attach it to an existing bill to extend unemployment benefits.

It will be interesting to see how many move-up buyers take advantage of the $6,500 credit, which is not a huge incentive. I guess it would be the same as having your closing costs covered, only by the government instead of the seller. I can’t see where that would be a driving force to move up in this market unless you were already considering the prospect.

Readers: Would the $6,500 credit spur you to sell your current residence and buy another property?

Reality Check: Buy or Wait?

Mon, 02 Nov 2009 12:00:00 GMT

Just when we were about to quit our search for a single-family house to purchase as an investment rental property, we may get another chance at a house we failed to get because we were too cautious in our bid. We have also decided to seriously consider another property that is significantly run down, but may offer the best opportunity for solid positive cash flow.

That’s the way it is when shopping for real estate, whether it’s buying a house you want to make a home or an investment property. Although I’m not sure how either of these properties will work out, I do know that we will take a hiatus from our search if we can’t close on one of them.

The reason we’ll take a break is that our area in Southern California is seeing a lot of competition for homes in the entry-level market, which is popular with first-time buyers and investors. Our median price is more than twice the national median of about $171,000, so the first-time buyer’s tax credit has not been a big factor. It is unlikely that an $8,000 credit is going to make the difference in purchasing a $350,000 property.

Our goal had been to pay $350,000 to $375,000 for a single-family home. With a 20 percent down payment, we figured we’d be able to come close to breaking even with a market rent of $2,000 to $2,100.

But two factors have changed our plan. The first is that rents have declined up to 10 percent in our area. Houses that rented quickly at our target price are now going for under $2,000. The other factor is that every home that has met our needs has received multiple bids, raising the sales price above where we can cover our costs.

The current low interest rates and the reported technique of lenders employing a measured release of foreclosures has created greater demand than there is supply. This phenomenon appears to be unique to the entry-level market. Houses above this level are largely taking many months to sell.

Our choice is to pay more and live with a negative every month or take the chance that there will be less interest as we get into the winter months. We’ll still keep an eye out, but I’m not optimistic.

The two properties mentioned above, however, offer some possibility we can close our deal now instead of rolling the dice on how the market direction in the near future.

We had offered $320,000 on a three-bedroom, two-bath house in a nearby community. The property is in an improving area and on a large lot that I believe will be in great demand and make for a good long-term investment. The down side is the property does not have a garage or a master bedroom with its own bath. Those two issues will make the house less popular with renters. All this equates to an estimated negative cash flow of at least $200 a month. Depreciation and other tax breaks will help bring this amount to near zero for the year.

The second property includes two rental units in desperate need of repair. The lot is also large and near the city’s library and government office. The vast majority of properties in this neighborhood are rentals. A majority of the properties appear to be well kept. Because of its condition, this property will be difficult to get bank financing, at least not without a significant down payment of a third to half the contract price.

This property will also require additional money to get the units to where they are desirable rentals. On the plus side, even with these expenses, the property will offer excellent cash flow and the size of the lot and its closeness to city amenities has long-term appeal.

We have some decisions to make in the next day or so regarding the first property because it’s received a lot of attention since being relisted. Our understanding is that our first offer was no more than $5,000 off the winning bid, so it will be interesting to see if the market has changed in the past two months based on how many offers are made and at what price.

I’ll let you know what we decide and what happens to these two properties in a future Reality Check post.

Loan mod vengeance

Mon, 02 Nov 2009 06:00:00 GMT

It's been awhile since I've hung out in the real estate crime beat, but here we are again. I ran across this story recently about a couple in Los Angeles arrested on charges that they tortured two purported loan modification agents that they suspected of ripping them off. According to Reuters, Daniel Weston and Mary Ann Parmelee owned a house together that was in foreclosure. They had tried to get a loan modification, had been frustrated with the lack of results, and wanted their money back.

At some point, they concluded they’d been swindled and decided that a refund wasn’t enough. What they really wanted was to beat the crap out of these guys. If convicted, they could face life in prison, according to the Reuters article.

I’m not condoning their actions, but knowing some folks who have tried unsuccessfully to get their loans modified, I can see where that frustration could lead to rage, especially if I thought the person I trusted to help me turned out to be a crook. There’s nothing more heinous than con artists who take advantage of people who are vulnerable. It’s one thing if people are taken in because of their own greed; it’s quite another when they’re targeted because the scammers know they’re on the verge of losing their house.

The story also pointed out that this crime occurred about the same time that local housing advocates were rolling out a campaign to warn homeowners about mortgage rescue scams. If you're in the midst of pursuing a loan modification, you might want to check out these tips from the Federal Trade Commission on recognizing the signs of a foreclosure rescue scam.

Four facts about Gen Y buyers

Fri, 30 Oct 2009 10:00:00 GMT

From where Raffi Arslanian sits, Generation Y is the perfect home buyer. The architect and developer has 20 years experience designing and building commercial and residential properties, but turned his focus to Generation Y in the past five years. He tailors his units in northern New Jersey to these buyers—who Cyberhomes finds are increasingly picky and still want all the finer things in life. And despite the downturn in the economy, he says his units are still selling out.

Why? Arslanian points to a happy marriage of small scale, public transportation, design aesthetic and financing.

According to him, these are the top four things Gen Y is looking for in their next—or first—home:

Walkability

"Ten out of 10 of my buyers want public transportation," he said. "It’s not even nine out of 10. They want that public transportation, and if they don’t, it’s only because they’re in sales and have to have a car and are driving around all day. They want to get up in morning, walk no more than a few blocks to the station and they do not want to spend 45 minutes on public transportation. If it takes no more than 30 minutes door-to-door we’re good. More than that, and there’s more hesitation."

Priced right

"Dollar price and financing are absolutely key," he said. "After $3,000 a month, they fall off the planet. That's the market now: The guys who can buy now are very capable, very educated, very traveled—they're just young. They just don't make $300,000 a year."

And they're also unwilling to take whatever's offered, he said. They negotiate and negotiate hard to keep their home an asset instead of feeling trapped by it.

"They don’t want their home to be shackles on their feet," he added. "I come across this day in and day out. They say, 'Raffi, I’m not working for my home. I don’t want to be a slave to my home. What can we do?' They have these horizons, where the buyer is thinking, 'What will the economic picture look like five years from now?' So I have to paint a picture of what it will look like in five years. They’re staying in their homes longer than they used to. Or they’re planning on keeping the place as a rental."

Zero down

Despite tightening lending standards, Gen Y still is all about the no-money-down loan, he said. So to accommodate that, Arslanian makes sure his buildings are a few things:

Small

No more than 30 units, and you don’t have to include extras like a pool and a gym that increase maintenance fees. "On a 1,200-square-foot apartment, that maintenance bill needs to be under $350 a month or buyers walk."

FHA approved

His units are Federal Housing Authority approved, which means buyers may qualify for a loan with just 3.5 percent down. "When you have a building that’s FHA approved and is priced as we are, you get a lot of newly married couples or younger single people. These people are making the money but they don’t have the capital for a down payment."

Full of concessions

"If I can find a way to come up with the 3.5 percent, then I've got buyers," he said. Arslanian does that by providing concessions in pricing and finishes.

High style on a budget

"What they want is something that looks high style without necessarily being top of the line," he said. "They don’t need that. They’re looking for a hotel-style look while not being too cold or slick."

So how does he achieve this? He chooses finishes carefully:

Lose the clichés

His units don’t boast the glass backsplashes or the bathroom sinks that look like fishbowls—he says his customers are over that. Instead, they want a modern look and to feel like "they could greet friends in with a martini in their hands."

Go high-tech

To do this, he installs a media system that he says appeals to Gen Y’s need for technology and their sensibilities. "That has value in their eyes. It includes a flat-screen TV, an iPod doc, shelving," as well as surround sound already wired. Next, he’ll be adding a small niche for the laptop and mail. "They don’t want to use their second bedroom as an office and they don’t want to work on their computer on their lap."

Give light, not views

"If they can afford a magnificent view, they aren’t buying from me," he said. "So we build monster windows in the apartment and cover them with custom shades [included in the price of the home]. So when my customers walk in, they are not looking at the neighbor. But they can get plenty of light and they can walk to a bus and be in midtown in a few minutes."

Haunted houses

Fri, 30 Oct 2009 06:00:00 GMT

When your kids go trick or treating this year, is there a "haunted house" they'll try to avoid?

In my town, there are no true "haunted" houses that I know of, but there is this one old once-mansion that now is quite decrepit and appears to be falling down. My daughters do call it a "haunted house," sad to say. It's a shame because the home must have been wonderful in its day -- it looks like it was once surrounded by beautiful gardens, but they are now a tangled mass of weeds. Luckily, the owner is fixing up the home, but it has been a very slow process. The roof is covered with a blue tarp, and part of the home's exterior is just plywood.

The only other "haunted" house I know of in my neck of the woods is the Cranbury Inn in Cranbury, N.J. While now a restaurant, the inn was originally a home built in 1800 and has a fascinating history -- it is said to have been a stop on the Underground Railroad and a favorite dining place for Albert Einstein. When the movie, "I.Q.," which is a fictional account of Einstein's life, was filmed in Central New Jersey with movie stars Meg Ryan, Walter Matheau, Tim Robins and Susan Sarandon, some of the movie's scenes were filmed at the Cranbury Inn.

There are many tales of ghost sitings there. I once had the pleasure of writing a Halloween story about the inn for a local newspaper and was told several tales by the restaurant's staff about seeing apparitions throughout the home. Needless to say, the next time I dined there, I felt a little on edge.

Spooking buyers

Whether a place is considered to be "haunted" can affect the saleability of a home, according to a recent story by the Wall Street Journal. However, Realtors aren't required to tell prospective buyers that a particular property is believed to be haunted, the Journal quotes Walter Molony, a spokesman for the National Association of Realtors as saying. (I would sure be angry at my Realtor if he or she failed to share that little bit of information with me!)

You can be sure that I would in no way would buy a home that is thought to be "haunted." (Even though a famous "ghost," Ocean Born Mary, is in my father's family, and is said to haunt her former home in Henniker, N.H. I've never visited the house, however.)

Nic Cage's haunted house

Of course, some people are drawn to such homes and would buy them for their "haunted" reputations. I suppose that's what drew Nicolas Cage to the LaLaurie house in New Orleans, which is said to be the most haunted house in the city. The actor supposedly has decorated the home with old horror movie posters and old skulls. (Yuck!) But the residence won't belong to the actor much longer -- a lender has foreclosed on the home (and another of Cage's properties in the city) and is set to go up on the auction block next month.

Wondering whether there are any "haunted" houses in your area? Try going to hauntedhouses.com and click on your state for a list of spooky homes in your locale.

Readers: Have your own haunted house stories? I'd love to hear them!

Obama's neighbor sets asking price

Thu, 29 Oct 2009 10:00:00 GMT

Wonder how much it would cost to live next to the president? Possibly $1,849,900, if President Barack Obama's neighbors get their asking price.

The neighbors' home, at 5040 S. Greenwood Avenue in Chicago, in the Hyde Park/Kenwood neighborhood, was first listed by Obama’s neighbors, Bill and Jacky Grimshaw, without a price over a month ago. The asking price is nearly $250,000 more than what Obama paid for his home -- which reportedly is in much better condition --four years ago. (Obama paid $1.6 million.) The Grimshaws purchased their home for $35,000 in 1973.

Reuters notes that while a few area homes have sold for more than $2 million recently, the housing market slowdown has definitely hit the neighborhood.

Want a look inside the neighbor’s residence? CNBC offers a pretty interesting slideshow on the Obama neighbors' home on its website. The house was used as a place for officers to stay during World War II and was also once a boarding house for a military school, CNBC says. Among the features of the 6,000-square-foot home (which sits on a 12,000- square-foot lot) are beautiful wood floors and original woodwork, large stained-glass windows and beamed ceilings.

The final sale of the home will rest on a Secret Service check on the home buyer, CNBC says. Obviously, security around the house is high, thanks to its proximity to the Obama residence. The home’s listing agent, Matt Garrison, refers to Obama’s street as “the world’s ultimate gated community,” Reuters says.

Of course, views of the First Family’s home can be seen from the Grimshaw house. Imagine catching a view of the president while eating a bowl of Wheaties. Now, that’s a way to start the day.

Update on homebuyer credit

Wed, 28 Oct 2009 05:00:00 GMT

Give politicians enough time and they’ll keep coming up with a new angle. That’s apparently what’s happening with the First-time Homebuyer Tax Credit that will expire Nov. 30.

With three proposals already running around the Senate, a fourth idea is gaining traction according to a report by Bloomberg News and may now be the front-runner.

Many of those who felt left out of the previous Homebuyer Tax Credit that was part of the American Recovery and Reinvestment Acts of 2008 and 2009 will be happier with this latest proposal, although the maximum credit is about 9 percent less than the previous programs.

The latest proposal, according to Bloomberg, will allow homeowners who have lived in their current home for the past five years to take advantage of the new credit. The credit will remain at 10 percent of the purchase price but be capped at $7,290 instead of the current $8,000.

First-time buyer income limits would remain at $75,000 for individuals and $125,000 for couples. For those who have owned their home for at least five years, the income levels would be $125,000 for individuals and $250,000 for couples. Also, the credit will not be available on any home purchase above $800,000.

The National Association of Realtors has stated it wants a credit that is good through 2010 to take advantage of the popular spring and summer buying seasons. The organization will be disappointed with this option.

This latest version of the credit will only be available to homes that are under a purchase contract by April 30, 2010. The purchase must also close by June 29, 2010.

Other proposals being shopped in the Senate include leaving the program as-is and just extending it through 2010, expanding the credit to $15,000 maximum and opening it to all buyers, or leaving the credit intact but reducing the amount by $2,000 every three months beginning April 1 to gradually phase out the program.

Senate mulls homebuyer tax credit

Wed, 28 Oct 2009 08:00:00 GMT

While the Clash for Clunkers credit program has come and gone, the Homebuyer Tax Credit is finding a lot more support, especially onCapitol Hill where three different proposals are being considered.

The current First-time Homebuyer Credit will end on December 1,which Realtors say has produced a spike in business. Unlike the 2008Housing and Economic Recovery Act, the 2009 version does not requirethe buyer to pay back the credit, which has made it much more popular.

Ifsome politicians have their way, the incentives to purchase a housewill get even better and not just for first-time buyers. Some backersof extending the credit are attempting to tie a homebuyer tax credit toa bill that will extend unemployment benefits 14 weeks and 20 weeks forthose living in states with an unemployment rate of 8.5 percent orhigher.

Here’s a look at the three proposals being lobbied for on Capitol Hill:

•The most popular plan in real estate circles is a bi-partisan one thathas been proposed by Senators Christopher Dodd (D-Conn.) and JohnnyIsakson (R-Georgia). Isakson is a former real estate agent. Thisproposal increases the credit to a maximum of $15,000 and opens it upto all buyers and not just first-timers. It would also raise the incomelevels so more people would qualify.

• The most recentproposal has not been as warmly received by the real estate industry. Aproposal by Senate Majority Leader Harry Reid (D-Nev.) and SenateFinance Committee Chairman Max Baucus (D-Mont) would extend the currentcredit through March 31, 2010. After that date, the $8,000 credit wouldbe reduced $2,000 every quarter. The credit would be worth $6,000 fromApril 1 through June 30, $4,000 from July 1 through Sept. 30 and $2,000from Oct. 1 through Dec. 31 of 2010.

• The least sexy proposal is to keep the current homebuyer credit as is but extend the deadline through June 30, 2010.

Readers: Which proposal do you think is the best for helping turn around the economy in general and the housing market in particular?