RISMEDIA, January 14, 2010—RealtyTrac, one of the leading online marketplaces for foreclosure properties, recently released its Year-End 2009 Foreclosure Market Report, which shows a total of 3,957,643 foreclosure filings—default notices, scheduled foreclosure auctions and bank repossessions—were reported on 2,824,674 U.S. properties in 2009, a 21% increase in total properties from 2008 and a 120% increase in total properties from 2007. The report also shows that 2.21% of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 1.84% in 2008, 1.03% in 2007 and 0.58% in 2006.

According to RealtyTrac, foreclosure filings were reported on 349,519 U.S. properties in December, a 14% jump from the previous month and a 15% increase from December 2008—when a similar monthly jump in foreclosure activity occurred. Despite the increase in December, foreclosure activity in the fourth quarter decreased 7% from the third quarter, although it was still up 18% from the fourth quarter of 2008.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James J. Saccacio, chief executive officer of RealtyTrac. “After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline.

“Despite all the delays, foreclosure activity still hit a record high for our report in 2009, capped off by a substantial increase in December,” Saccacio continued. “In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”

Nevada, Arizona, Florida post top state foreclosure rates in 2009
More than 10% of Nevada housing units received at least one foreclosure filing in 2009, giving it the nation’s highest state foreclosure rate for the third consecutive year. Nevada foreclosure activity in December increased 27% from the previous month but was still down 22% from December 2008. Fourth quarter foreclosure activity in Nevada was down 37% from the previous quarter thanks to substantial decreases in October and November.

Arizona registered the nation’s second highest state foreclosure rate in 2009, with more than 6% of its housing units receiving at least one foreclosure filing during the year, and Florida registered the nation’s third highest foreclosure rate, with 5.93% of its housing units receiving at least one foreclosure filing during the year.

Other states with 2009 foreclosure rates ranking among the nation’s 10 highest were California (4.75%), Utah (2.93%), Idaho (2.72%), Georgia (2.68%), Michigan (2.61%), Illinois (2.50%), and Colorado (2.37%).

California, Florida, Arizona, Illinois account for 50% of national total
Four states accounted for more than 50% of the nation’s 2009 total, with more than 1.4 million properties receiving a foreclosure filing in California, Florida, Arizona and Illinois combined.

A total of 632,573 California properties received a foreclosure filing in 2009, the nation’s largest state foreclosure activity total and an increase of nearly 21% from 2008. After four straight month-over-month declines, California foreclosure activity in December increased nearly 9% from the previous month, but the state’s fourth quarter foreclosure activity was still down 17% from the previous quarter.

Florida posted the nation’s second largest total, with 516,711 properties receiving a foreclosure filing in 2009—a 34% increase from 2008. The state’s fourth quarter foreclosure activity was down nearly 9% from the previous quarter despite a 4% monthly increase in foreclosure activity in December.

Arizona foreclosure activity in December spiked 40% from the previous month, helping the state post the third largest foreclosure activity total for the year. A total of 163,210 Arizona properties received a foreclosure filing in 2009, a nearly 40% increase from 2008.

A total of 131,132 Illinois properties received a foreclosure filing in 2009, the nation’s fourth largest total and an increase of nearly 32% 2008. The state’s fourth quarter foreclosure activity increased nearly 29% from the previous quarter, and the state’s December foreclosure activity was up nearly 9% from the previous month.

Other states with 2009 totals among the 10 highest in the country were Michigan (118,302), Nevada (112,097), Georgia (106,110), Ohio (101,614), Texas (100,045), and New Jersey (63,208).

RISMEDIA, January 14, 2010—Trulia.com recently announced that 21% of homes currently on the market in the United States as of January 1, 2010 have experienced at least one price cut. This represents the second straight month price reduction levels have decreased and the lowest level since Trulia started tracking price reductions in April 2009. The total amount slashed from home prices also dropped to $21.2 billion compared to $24.7 billion in December, a 14% decrease. The average discount for price-reduced homes continues to hold at 11% off the original listing price. This was also the second straight month where inventory levels have dropped for single-family homes and condos across the United States.

South Continues With Least Amount of Homes Reduced
The South has the lowest overall level of price reductions, with 20% of current listings experiencing at least one price cut, while the Northeast saw the biggest decrease in price reductions compared to the previous month- 12%. (Regions according to the U.S. Census Bureau)

South- 20% of listings with price reductions
West- 22% of listings with price reductions
Midwest- 22% of listings with price reductions
Northeast- 22% of listings with price reductions

“Consumers have a golden window of opportunity to find a great home and take advantage of the tax credit before mortgage rates start to rise,” said Pete Flint, Trulia co-founder and CEO. “Historically low interest rates currently available and tax credit incentives are the ultimate price reductions for home buyers. As rates rise throughout the course of the year, buyers will need to adjust their purchase price ceiling.”

The number of major U.S. cities with price reduction levels at 30% was cut by 50% in January. In December, 14 major cities saw a reduction of 30% or greater and that number has been reduced to just seven cities in January. Additionally, Minneapolis, which has the held the top spot for the past two months, experienced a 33% decrease compared to the previous month. Cities experiencing the largest decreases in percentage of listings with price reductions compared to the previous month include:

Los Angeles, CA – 46% decrease in price reductions
New York, NY – 36% decrease in price reductions
Memphis, TN – 34% decrease in price reductions
Minneapolis, MN – 33% decrease in price reductions
Honolulu, HI – 33% decrease in price reductions

Luxury Market Still Hardest Hit
Luxury homes (those listed at $2 million and above) continue to be hit the hardest by price reductions with the average discount rising to 15% for the first time since Trulia started tracking in April 2009. Additionally, luxury homes represent less than 2% of all current listings on Trulia, but are responsible for 24% of the $21.2 billion in home price reductions. The average discount for homes priced less than $2 million continues to hold at 10%.

RISMEDIA, January 7, 2010—As we begin 2010, both real estate professionals and home buyers have something to look forward to and more importantly, take advantage of—the extended and expanded home buyer tax credit.

Originally created in 2008, the home-buyer tax credit has evolved from a $7,500 credit, which had to be repaid by the home buyer over the course of 15 years, to an $8,000 tax credit with no repayment required in 2009. Now, for a limited time in 2010, the $8,000 home buyer tax credit will still be available to first-time home buyers and certain current homeowners will also be eligible for a $6,500 credit.

To help everyone better understand the extended and expanded home buyer tax credit, here are some highlights of the changes.

Who can claim the credit?

“First-time home buyers” who purchase homes between November 7, 2009 and April 30, 2010 are eligible for the credit. 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.

For current homeowners purchasing a home during the same time frame, they are also eligible for a tax credit, so long as the home being sold or vacated was their principal residence for five consecutive years within the last eight. To elaborate, it must be the same home; it is not enough that they have been homeowners for five consecutive years, they must have been in the same home for five consecutive years.

Another key point is that the existing home does not need to be sold. One must, however, occupy the new home as a principal residence and do so for three years or risk recapture of the credit. Also, the new home does not need to cost more than the old home despite the concept that it is directed at “move up” buyers.

How much is the credit and what are the income limits?

The maximum allowable credit for first-time home buyers is $8,000 or 10% of the sales price, whichever is less. For current homeowners, it is $6,500 or 10% of the sale price, whichever is less. Under the extended home buyer tax credit, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum credit.

The credit decreases for single buyers who earn between $125,000 and $145,000 and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit deceases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income – over $145,000 for singles and over $245,000 for couples – are not eligible for the credit.

What are the deadlines for qualifying for the credit?

Under the extended home buyer tax credit, as long as a written binding contract to purchase a home is in effect on April 30, 2010, and the deal is closed by July 1, 2010, one can claim the credit.

Will the tax credit need to be repaid?

No, the buyer does not need to repay the tax credit if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale. Another provision of the law waives the recapture provisions for service members who receive orders that require them to move.

Are there any other critical provisions?

-There are three provisions people should be aware of:
-There is an $800,000 limitation on the cost of the home
-The purchaser must be at least 18 years old on the date of purchase
-For a married couple, only one spouse must meet this age requirement and dependents are not eligible to claim the credit

Finally, as an anti-fraud measure, purchasers must attach documentation of purchase to his/her tax return claiming the credit. Normally this would be a copy of the HUD-1, but could include other documents memorializing the settlement.

As with all tax matters, responsibility for complying with the tax code belongs to the taxpayer. Real estate professionals should recommend that their buyers consult their tax professionals to ensure eligibility for the credit and the proper way to claim the credit. For more information including the required IRS forms please contact the Internal Revenue Service at 800-829-1040.

Ken Trepeta is the Director, Real Estate Services for the National Association of REALTORS® Real Estate Services program.