Previously, the $8,000 first time home buyers tax credit was set to expire on November 30, 2009 but has now been extended, uninterrupted through April 30, 2010. A second credit of up to $6,500 has been added allowing existing homeowners to “move-up” and take advantage of the incentive.

EXTENDED: First-time buyers who have not owned a home in the past three years are eligible for up to an $8,000 tax credit.

• Tax credit does not require repayment.
• Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000. Previously, the limit was $75,000 for individuals and $150,000 for couples.
• Buyers must secure a binding contract by April 30, allowing 60 days to close. Previously, the sale had to closed by the expiration date, now the purchase must be under contract by the expiration date and closed by June 30, 2010.

EXPANDED: Qualified homeowners who have lived in their current home for at least five of the past eight years are eligible for up to a $6,500 tax credit to buy a home, effective as of November 7, 2009.

• Tax credit does not require repayment.
• Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000.
• Credit is limited to homes priced $800,000 or less.
• Buyers must secure a binding contract by April 30, allowing 60 days to close.

The National Association of Realtors put together this chart outlining the tax credit changes. To download the PDF file, click on the image:

For more information about the tax credit, please consult with your Realtor, loan officer and/or tax advisor.

Related references:
IRS - First Time Homebuyer Tax Credit
NAR - Tax credit basics

The Seattle Times reports that Heron/Pagoda Towers developer Multi Capital Group has lost part of the property through foreclosure.

A developer who had proposed a $900-million, twin-tower development across Fifth Avenue from the Westin Hotel in downtown Seattle has lost part of the property to foreclosure.

New York lender G4 Capital Partners took title to about half the site of the proposed Heron and Pagoda towers this week, according to county records. G4 had loaned an affiliate of New York developer Multi Capital Group $13.7 million to buy the property, but the affiliate defaulted.

Ashworth Cottages

A Pryde+Johnson development in the Green Lake neighborhood had sold only 2 of its 20 homes in the two years before the bank took over the development a few months ago. Since returning to market three weeks ago with steep discounts they’re now down to their last four units.

Even though they’re nearly closed out, Ashworth Cottage’s latest sales team is hosting its official Grand Opening on Saturday, November 14th with lattes from 11-1pm and hotdogs from 2-4pm. www.liveashworth.com

European Tower

GIS International is bucking the trend and moving forward with pre-sales at its one-home per floor European Tower development. They’ve reduced prices significantly and re-launched their website. www.europeantower.com

Marselle Condominium

Marselle reports that they’ve sold 20 units last month and 13 owners have already moved into their new digs. Half of the homes are priced under $300,000. www.marsellecondos.com

The median condo price rose to $300,000 last month, reflecting a 4.37% increase over last October and a one-month rise of 15.7% from September. That also reversed an 8-month slide in the year-over-year median price figures. In theory, the actual median price was higher than $300,000 as sales resulting from non-traditional means are not attributed in the NWMLS statistics. While I don’t have up-to-date closing numbers from the Brix and Gallery auctions (they were supposed to close by the end of October), only a handful of Brix sales were accounted for in the NWMLS figures, out of approximately 80 sales. The median sales price for the Brix and Gallery auctions was $330,000.

The number of Pending sales (under contract but not yet closed) increased dramatically in October to 272 units, an increase of 73.3% over the prior year and 8.4% more than September, presumably due to the tax credit deadline.

Closed sales increased 12.2% in October to 184 units compared to the same period last year. This is rather significant as it was the first year-over-year increase in closed unit sales since November 2007.

The number of active listings dropped to 1,337 units last month, a 5.2% decrease from October 2008 and a 1.1% dip from September.

The inventory supply rate decreased to 4.9 months, the lowest since August 2007, which would be indicative of normal market conditions. I base the supply rate on pending transactions rather than closed sales, which is the most common method. A case can be made that given the prevalence of short sale failures that using closed sales is a better option. In that case, the supply rate would be 7.3 months of inventory - a buyer’s market. However, supply is dependent on available properties and once a property goes pending it’s generally removed from active inventory and is no longer available to other buyers.

What does all this mean? Have we reached bottom and are now on the upward swing? For now, I’m going to say that October results were a little anomalous given that much of the activity was spurred by the pending deadline (at the time) of the first time home buyers tax credit. The same will hold true for November as well. Now with the credit extended through April 2010 and expanded to include existing homeowners, there’s no longer an urgency to incent buyers to act. On the other hand, the tax credit may provide just enough inertia to keep the condo wheels spinning through the end-of-the-year cyclical downturn.

Source disclaimer: Most, though not all, information and statistics were complied and published by the NWMLS.

Queen’s Court just adjusted prices again, reflecting an additional 5.4% to 13.7% discount since their last reduction in September. Compared to prices from a year ago, the current prices reflect a reduction ranging from 19% up to 27%.

Click for larger image:

Originally built in 1930, Queen’s Court retains much of its original period details that’s supplemented with modern finishes and conveniences. The conversion was undertaken by Live Historic, who also renovated the nearby The Pittsburgh. Queen’s Court recently changed hands through foreclosure.

Avaview Condominium - 9056 Mary Avenue NW
Six of the 11 homes at Avaview will be sold at the auction. Located in Seattle’s Crown Hill neighborhood, Avaview offers one and two-bedroom homes ranging in size from 646 to 738 square feet. Interiors feature stainless steel appliances, granite countertops and breakfast bars, frieze carpeting, private decks or patios and engineered hardwood flooring in kitchens and entries. Minimum bids for Avaview will begin at $150,000. View auction property info.

Sunrise on the Lake - 13426 Greenwood Avenue N
Sixteen of the 39 homes at Sunrise on the Lake will be sold at the auction. Located in Seattle’s Broadview neighborhood, Sunrise on the Lake is set on the shores of Bitter Lake. Sunrise features studio, one and two-bedroom homes ranging in size from 502 to 895 square feet. Interiors feature stainless steel appliances, hardwood flooring in kitchens and entries, natural hardwood cabinetry, slab granite countertops, and private decks with lake views. Minimum bids for Sunrise on the Lake will begin at $125,000. View auction property info.

The Summit - 900 Summit Ave E
Everything is new at this down-to-the-studs remodel. All 14 homes at this Capitol Hill boutique building will be available at auction. The one and two-bedroom homes range in size from 531 to 795 square feet and feature stainless steel appliances, hardwood flooring in kitchens and entries, solid wood cabinetry, granite countertops, private decks and controlled access entry. Minimum bids for The Summit begin at $140,000. View auction property info.

Auction Infomation
The auction will be held at 1:00 PM on Saturday, December 5, 2009 at the Sheraton Hotel in downtown Seattle, which is located at 1400 6th Avenue.

Auction buyers must pre-register no later than Thursday, December 3rd and will need to be pre-qualified through the Seller’s designated lender. Buyers may elect to use their own lender, however.

Auction website: www.SeattlePropertyAuction.com

For more information, please download the auction brochure (click on image):

Thornton Place website: www.thornton-place.com

HOME #108 was $399,990, just reduced to $309,500!
801 sf. 1 bed/1bath. Views are spectacular from living room and large ground floor patio surrounded by large landscaped courtyard. 9’ ceilings, smooth and attractive slab granite counters throughout, hardwoods in entry, kitchen and living room. Home 108 is a ground floor home with spacious and comfortable patio surrounded by lush and colorful landscaping throughout the courtyard.

HOME #111 was $349,990, just reduced to $309,500!
801 sf. 1 bed/1bath. Ground floor home. 9’ceilings, smooth and attractive slab granite counters throughout, hardwoods in entry, kitchen and living room. Cozy and spacious outdoor patio surrounded by lushly landscaped courtyard has sweeping views of Lake Union and surrounding area.

HOME #408 was $399,990, just reduced to $335,500!
801 sf. 1 bed/1bath. Sunset and Lake Union views are stunning from living and terrace. 9’ ceilings, smooth and attractive slab granite counters throughout, hardwoods in entry, kitchen and living room. Home 408 is a top floor home with spacious and comfortable terrace looking down to lush and colorful landscaping throughout the courtyard.

Home #302 was $479,990, just reduced to $315,500
934 sf. 1 bed/1bath. 9’ ceilings, large bedroom, and large private deck. Smooth and attractive slab granite counters, hardwoods in entry, living and kitchen. Faces north and west from private terrace off living room.

Home #313 was $399,990, just reduced to $309,500
718 sf. 1 bed/1bath. Unique corner home with convenient area off entry that can be used for a desk or small office area. Home faces north and west overlooking beautifully landscaped courtyard, with dramatic views of Lake Union and surrounding area. 9’ ceilings, smooth and attractive slab granite counters, hardwoods in entry, kitchen and living.

Home #409: was $399,990, just reduced to $325,500
801 sf. 1 bed/1bath. Views are spectacular from living room and large private deck! 9’ ceilings, smooth and attractive slab granite counters throughout, hardwoods in entry, kitchen and living room. Great price for 3rd floor home with large terrace and sweeping views of Space Needle and Lake Union!

Ruby’s Website: www.RubyCondos.com

All homes include one garage parking and storage.
FHA, low-down financing available through Seattle Mortgage.
Dimensions are as per the “as built” survey in the POS. Prices and terms are subject to change without notice.

FHA has revised its guidelines for condominium mortgages. The new guidelines will take effect with all case numbers assigned on and after December 7, 2009 November 2, 2009. (Note: the guidelines were initially scheduled to take effect on October 1, 2009 but have been delayed to November 2nd.)

FHA is implementing a new approval process for condominium projects, and with it, the elimination of the “spot approval” process. Spot approvals were used by lenders to qualify an individual buyer’s condo purchase using FHA where the condo project was not previously approved by HUD/FHA. In its place is a new streamlined process, which may affect buyers, sellers/developers and homeowner associations.

With FHA loans becoming more prevalent with its low down payment and flexible eligibility requirements, condo buyers, sellers and their HOAs should keep these changes in mind. For instance, if an HOA has not yet conducted a reserve study, they will now need to do so if owners wish to sell to an FHA buyer, who are becoming an increasingly larger segment of home buyers.

Owner occupancy:
+ Prior to December 7th: 51% of the units must be owner occupied.
+ As of December 7th: 50% must be owner occupied or sold to owners who intend to reside in the unit.

Single owner status:
+ Prior to December 7th: No single entity may own more than 10% of the units.
+ As of December 7th: No more than 10% may be owned by one investor. This applies to builders that subsequently rent vacant and unsold units. This will not only affect the developer who intends to sell their unsold units, but also to existing unit owners in the project. For 2 or 3-unit buildings, no single entity may own more than one unit.

FHA Concentration:
+ Prior to December 7th: For projects over 30 units, no more than 10% may be insured by FHA; for projects with less than 30 units, no more than 20% may be insured by FHA.
+ As of December 7th: For projects with 4 or more units, no more than 30% may be insured by FHA; for 2 or 3 unit projects, only one may be insured with FHA. The change increases the FHA concentration allowing for a greater number of FHA buyers/owners.

Reserve Study:
+ Prior to December 7th: No requirement. However, Washington State law requires homeowner associations to conduct reserve studies, though there is no enforcement provision.
+ As of December 7th: FHA will require that a current reserve study must be performed to assure adequate funds, which must not be more than 12 months old. This is a good change as it’ll incent the HOA to conduct a reserve study.

Insurance:
+ Prior to December 7th: The HOA must provide evidence of appropriate hazard, liability and flood insurance.
+ As of December 7th: The project must be covered by hazard and liability insured, and were applicable, flood insurance.

Other changes include:

Arrears: No more than 15% of the total units may be in arrears of their HOA dues (30 days past due).

Commercial space: Nore more than 25% of the property’s total floor area in a project can be used for commercial purposes.

Conversions: The one year waiting period is eliminated, though the project, including common areas, must be 100% complete.

Endorsement: At least 50% of the units must be sold prior to endorsement of any mortgage on a unit.

Legal phasing: Allows the owner occupancy percentage to be based on release phases.

Recertification: Project approvals will expire two years from the date it was placed on the approved condo list and must be re-certified every two years.

As it is currently written, once the two years are up and condos need to be re-certified, as well as those projects hoping to be approved, may run into an issue with the environmental review section of the guidelines. The guidelines do not allow for projects to be within 1,000 of a highway/freeway, within 3,000 feet of a railroad and within 1 mile of an airport. Potentially, this could affect numerous projects along I-5, Aurora Avenue and throughout Belltown. However, it’s likely the rules may be amended again within the next two years.

This is only intended to provide a high-level overview of the upcoming changes to FHA backed mortgages. For more specific information, including whether FHA is an option for you, please consult with a FHA mortgage specialist.

Sources: HUD Mortgage Letter 2009-19 (WORD download), Guild Mortgage Company, and the Talon Group.

Veer Lofts offer three styles of home layouts: flats, full 16′ two-level lofts and a hybrid flexi-loft layout. Flats start from $259,500, Flexi’s from $282,500 and the full-lofts from $379,500.

Website: www.veerlofts.com

“What people might not realize is that the first-time tax credit expiration date means that the deal must close by November 30th, 2009,” explains Michael Miller, CEO of local real estate marketing firm, MCM Group. “It’s taking 30 to 45 days for deals to close, so really the deadline for purchasers to qualify for this credit is right upon us. Buyers who want to take advantage of this should make their decisions and have their offers signed around by early next week at the very latest.”

Sylvan Ridge has just two available new townhomes that are complete and ready to move in today. Two buildings are currently under construction with seven new townhomes, two of which have already been purchased. Building 27 is due for completion in late October, and building 28 in early November. Buyers of the homes in building 28 who make a decision by next week will still have time to customize the features with optional upgrades such as slab granite countertops.

“We partnered with a local interior finishes firm, Super Floors,” says Tamea Duckworth, Sylvan Ridge Community Sales Manager. “They can provide the buyers with upgrade options and interior design consultation to upgrade or change several of our finishes at Sylvan Ridge. But once they start installing the interior finishes in building 28 next week, buyers will miss the chance to roll the upgrade costs into their purchase and their mortgage.”

All townhomes at Sylvan Ridge feature two bedrooms, two bathrooms, den, powder room and attached garage. These zero-lot line townhomes are approved for VA and FHA financing, so qualified buyers can put as little as 3.5% down. Homes are priced from $289,950.

Located in West Seattle, these homes are just east of the new High Point neighborhood, offering buyers an easy commute to downtown Seattle and a myriad of choices for shopping, dining, entertainments and outdoor recreation. Sylvan Ridge is now in its third phase of construction, with over 70 homes sold and closed. When the community is complete there will be 178 townhomes.

Sylvan Ridge is located at 2733 SW Sylvan Heights Drive in West Seattle.

Website: www.sylvan-ridge.com