Florida real estate news isn't good, but there are encouraging signs

The Florida real estate market, with few exceptions, is still is a beaten-down condition although it is beginning to show a few signs of life. The state's high unemployment rate at 11.2% in September, the highest its been since the mid-1970's, isn't helping.

Most economists seem to feel that, on a nationwide basis, the recession is over, but you would not know it if you ask the average Florida "man on the street." They either can't find work themselves or know others who cannot. As a result, people are wary of investing in anything, including real estate.

Timothy Becker, director of University of Florida’s Center for Real Estate Studies noted that Florida was one of the first states into the recession, and it’s probably going to be one of the last ones out.

On the brighter side, the extension and expansion of the home buyer tax credit may help. Anyone who hasn't owned a home in the past 3 years is eligible for up to a $8,000 tax credit on a first-time home purchase. This program had a positive effect in 2009 and hopefully will help again in early 2010.

The fact that existing home owners, with certain income limitations, are also now eligible for up to a $6,500 tax credit means that of those who have a positive employment outlook may be begin to be willing to "move-up" to a bigger home.

The median sales price of a Florida home in September fell to $142,000 from the year-ago figure of $174,900, a 19% decrease, according to the Florida Association if Realtors. These substantial price reductions are also a positive in that they make homes more affordable to more prospective buyers.

On a cautionary note, the extension and expansion of the home buyer tax credit program requires that participants sign a purchase contract by April 30, 2010 and close on the purchase by June 30, 2010.

So, this current real estate market isn't real great, but there are a few positives that can help lift the Florida real estate market for a while. Overall, though the economy of the state, and that means "jobs" as a whole has got to pick up for a real estate recovery to be sustained in the future.

You Dont Have to be A First-Timer for the Extended Home Buyer Tax Credit

The current first-time home buyer tax credit, due to expire at the end of November, has been extended through April 30, 2010 by Congress and is on its way to the president for his signature. Realtors have reported that the first-time home buyer tax credit has had the same positive effect on home sales that the "cash for clunkers" program had on automobile sales.

The legislation expanded eligibility for the home buyer tax credit to include people with higher incomes and those who have already owned a home for at least five years so long as they sign a purchase contract by April 30, 2010 and close on the purchase by June 30, 2010. The $8,000 maximum first-time buyer tax credit will continue and now be available to individuals with incomes up to $125,000 and couples with annual incomes up to $225,000. Home buyers with incomes up to $145,000 and couples with incomes up to $245,000 will be eligible for reduced tax credits.

Under similar income limits, a $6,500 maximum credit will be available to those who already own a home and presumably wish to move up to a larger home.

Under the new income limits, two-thirds of all American families who own their own home may be eligible to buy a new home. While buyers will not be required to sell their current home to qualify for the new tax credit, the money must be used to buy a new "primary residence", not a vacation home or investment property.

To keep speculators out of the program, people who claim the credit but then sell the home or no longer use it as their primary residence within three years will be required to repay the credit. The intent is to exclude from the program speculators who might purchase a home intending to flip it for a fast profit, according to Max Baucus, chairman of the Senate Finance Committee.

Here's a "heads-up" to those who may have considered buying a first home under the prior program but didn't get around to it.

"Contact a Realtor and get started now. You only have until April 30, 2010."

Legislators in both houses of Congress have indicated that this costly program will not be extended again. Critics point out that only about one-fourth of the homes purchased under the prior program would not have been bought anyway without the costly tax-credit program. There are also concerns that the previous tax credit program encompassed high numbers of fraudulent transactions. In this version of the program, the Internal Revenue Service has been given much wider authority to oversee the process to root out fraud.