We.ve seen a solid increase in St. Louis real estate sales this year.   Lawrence Yun, chief economist of the National Association of Realtors is predicting a 20% increase in home sales for the first half of 2010.  We can count on 2.6 million home purhcasers taking advantage of the credit.  Yun admits that his prediction is assuming that we will continue to see historically low interest rates of around 5.0 to 5.5% — for today’s rates contact my mortgage partner Matt Eversgerd of Stifel Bank at 314-620-7227.

Currently, the Fed plans to end its purchase of Mortgage Backed Securities.  We will see rates rise on this action.  But we shouldn’t see rates go through the roof — they will likely land in the high 5s.  The rate change from today’s 4.875 for 30 year fixed rate money to the likely 5.875% we will see in 2010, means that every $100,000 that you borrow will cost you an additional $60 per month.

For example, a $250,000 loan today has a principal and interest payment of $1324. If rates increase a full percentage point, as expected by mid-2010, that same loan amount will cost you $1480.

I’m optimistic about 2010.  Throughout this past year the St. Louis real estate market has had it’s ups and downs, but my sense is that our outlook is better than it was a year ago.

One of the reasons for my optimism…. During 2008 and 2009, while the overall St. Louis transaction volume sank by 30%, mine went up.  I’ve sold 80 homes during the 08/09 decline.  So, Nolting Real Estate is doing something right for St. Louis real estate buyers and sellers.  Check us out.

The President has approved an extended and expanded tax credit for home buyers

The 2009 housing tax credit applied to first time home buyers only.  The new tax credit has expanded to include repeat home buyers — you may be eligible.  St. Louis real estate is turning around as a result of this tax credit.

**To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
**The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
**The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
**The tax credit applies only to homes priced at $800,000 or less.
**The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
**Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Government spending is up.  Inflation will follow.  Where should you invest your money today?

CNBC.com reports that real estate is an excellent investment in this economic climate.  Values are down, inventory is high, deals are out there.

Inflation will make your investment appreciate faster!  That coupled with historically low interest rates points to a pretty safe investment.  Real Property, Real Returns – Winterizing Your Portfolio 2009 – Special Report – CNBC.com.

If you are considering an investment property in St. Louis, check out my St. Louis Home Buyer’s Search site.  There you will find everything on the market in the area.

If you’re interested in buying a St. Louis foreclosure property, give me a call and I’ll email you an updated list of available properties.

HUD Hints on Home Buyer Tax Credit – Realty Check with Diana Olick – CNBC.com.

“I am also aware of the strong support in Congress for doing more to support the housing market, including extending the First Time Home Buyer Tax Credit beyond 2009. At the same time, I am mindful that these proposals can be very expensive, especially at a time of significant budget deficits. I can assure you the Administration will work with Congress to fashion appropriate and effective home buyer incentives, mindful of both their benefits to stimulating new demand and their costs to the American taxpayer.”

Does concern over the deficit and expense of the First Time Home Buyer tax credit mean that we are going to lose this credit.  St. Louis home buyers need the credit.  But at what expense?

• What is the amount of the first time home buyer’s tax credit? $8,000 is the maximum amount of the credit.  There are 2 factors at play when it comes to getting the credit: The cost of the home and the income of the person or married couple purchasing the home.  The credit can be 10% of the closing price up to $8,000 or a person making $75,000 or less or a married couple making $150,000 or less are eligible for the full $8,000.

• Do you qualify for the first time home buyer’s tax credit if your income is higher? Yes and no.  If you make more than the $75,000/$150,000 limit you get less of a credit.  The maximum income is $95,000 for singles or $170,000 for couples.  If you make more than the maximum income you are not eligible for the tax credit.

Attention first-time homebuyers:  Do you realize that the $8000 ObamaGift expires on December 1, 2009?

You must CLOSE on your first home on or before November 30, 2009.  So you need to have it under contract no later than November 1.  That’s less than 3 months away!

Sure, maybe the credit will be extended.  But maybe it won’t.  Do you want to miss this gift?  When was the last time someone plunked 8 grand down on your desk?

If you want to search for your next home, please visit my St Louis home listing resource.  Or, give me a call at 314 267 2636.